Dubai: Emirates Airlines has raised more than $42 billion (Dh154 billion) from 2001 through 2015 and out of that $3.8 billion was raised through Islamic financing, making it central to its financing strategy, according to Nirmal Govinda Das, senior vice-president corporate treasury of the world’s largest airline on international routes.
“It’s a continuous thrust [on Islamic financing], and there is so much of awareness now in the UAE, in Europe and in the US. It’s phenomenal the kind of money that is coming in,” Das said, adding “We have demystified the whole essence of Islamic financing, it is simple secure and stable.”
Islamic finance was benefitted tremendously during the global financial crisis of 2008, as it provided stability in uncertain times as the product is built on trust and quality.
“We went through the recession period. We had a few transactions that we did through Islamic financing during that period and those were the most stable transactions that stayed on because the very essence of Islamic financing is stability to go through tough times and good times together,” Das said.
This essence of stability made Emirates Airlines to look at it more harder, plus there was a thrust from the UAE and Dubai government, and that made the airline work very closely with the banks in the UAE and the Sharia scholars.
“We saw it was not complicated, it’s friendly and it helps business and it’s cost effective and anybody in the world can participate in the world,” Das said.
Emirates Airlines raised about $900 million recently through Islamic Financing through sukuk listed at the London Stock Exchange, and the Dubai Financial Market. This was arranged by 8 banks including Islamic banks.
“The key marketing strategy was to create awareness and the result was 30 per cent of the investors from the US and, another 30 per cent were from Europe” said Das. Investors from the Middle East and Asia subscribed the remaining part of the sukuk. Sukuk was taken up by diversified regional and global investors.
Phenomenal growth
The world economy is growing at 3.5 per cent now as against the Islamic economy, which is witnessing more than 9 per cent growth.
“It’s a phenomenal growth. Even if the world economy is growing at 3-4 per cent, the portion of that coming in towards is much more. We were to get a bigger share of that 3 per cent, and I think the growth will be there continuously for almost for decade atleast,” said Das.
Das said a huge potential has been opened up around Islamic economy.
“We as an airline are not just flying an aircraft as a group, but we have the airline ground handling, catering, and in that space we have a lot of activity coming in we have portal, travel agency, airlines and the financial world around that, and we have seen markets being created,” Das said.
