Saudi Airlines to finance Airbus deals through Islamic loans

Saudia, also known as Saudi Arabian Airlines, said that it plans to finance 50 Airbus planes ordered last week through Shariah-compliant loans.

The deal has a list price of about SAR 28.9 billion ($7.7 billion), while the total amount of Shariah-compliant loans raised globally through aviation loans since 2006 is SAR 21.75 billion ($5.8 billion), Bloomberg reported.

At the Paris Airshow last week, Saudia ordered 20 A330-300 regional planes and 30 A320s. The move comes as part of plan to nearly double its fleet to 200 aircrafts by 2020, according to data reported by Argaam.

Airbus is selling the planes to the Aircraft Leasing Islamic Fund, which will lease them to Saudia.

The carrier already has a SAR 7.2 billion Shariah-compliant loan outstanding. It also recently sold stakes in some of its units— including catering and ground-handling— through initial public offerings.