Emirates finds ways to expand

As other airlines cut capacity to cope with a global travel slump and banks shy away, Emirates Airline appears to have found a way to keep expanding by tapping the updraft in demand among global investors for corporate bonds.

Last week, Emirates announced plans to sell US$413.7 million (Dh1.51 billion) in bonds to finance the purchase of three Boeing 777 aeroplanes, marking the first time it has used bonds to borrow money to buy aircraft.

Analysts say the deal could help the largest Arab airline vault several new hurdles in its path to building a 450-aircraft fleet by 2020 that will turn Dubai into the world’s largest hub for international passenger traffic. While Emirates and other airlines have traditionally turned to banks to finance aircraft purchases, the global financial crisis has left banks reticent to make new loans, particularly to an industry projected to lose $11bn this year.