• Ex-Im and other ECA entities account for $1bn in Emirates funding in 2014-15
  • Emirates has 199 Boeing planes on order, valued at around $100bn

The recent shutdown of the US Import-Export Bank, which provides loan guarantees to clients of US exporters such as aircraft manufacturer Boeing, will have minimal impact to UAE airlines.

Ex-Im and other export credit agency (ECA) entities, for instance, accounted for only 21 per cent of the $5.1bn fund raised by Emirates in 2014-15 to buy new aircraft. A mix of Islamic finance and operating leases and bonds accounted for the remaining funds. Emirates’ sukuk issuance earlier this year attracted orders exceeding $3.2bn and was 3.6 times oversubscribed.

Furthermore, Ex-Im accounted for 12 per cent of the $26bn funding obtained by Emirates for its expansion programme over a 10-year period ending in 2011.

A Reuters report quoted an Ex-Im spokesperson saying the bank’s exposure in the UAE, between Emirates and Etihad Airways, is estimated at $4.3bn in guaranteed loans. Ex-Im is understood not to have provided other GCC airlines, such as Qatar Airways, with any guaranteed loans.

The US Congress allowed Ex-Im’s charter to lapse on June 30, based on the premise that the US credit agency has done little but promote welfare state and cronyism. Ex-Im helps finance the procurement of US goods for private enterprises and has primarily focused on supporting Boeing, Caterpillar and General Electric. As a provider of guaranteed loans, Ex-Im assumes the debt obligation if a borrower defaults.

Some analysts maintain that Ex-Im has outgrown its original mandate of supporting less-developed industries, since many airlines have grown and could obtain financing from other sources easily.

Boeing has some 380 aircraft units on order from Emirates Airline and Etihad Airways. Emirates accounts for 199 units, with a budget of at least $100bn.