April 30 (Reuters) – A Bahrain-Dubai joint venture has
closed a $94 million deal at list prices for the lease of three
Bombardier Q400 NextGen planes, its third
sharia-compliant aviation deal since December, an executive at
one of the firms said.

Use of lease financing has expanded among commercial
airlines. Large carriers, which tend to secure lower lease
rates, reduce the risk of a fall in the value of their fleets,
while smaller rivals gain aircraft they could not buy outright.

Under the 12-year deal, Bahrain-based Ibdar Bank and
Dubai-based Palma Holding will lease the Canadian-built aircraft
to Abu Dhabi-based Falcon Aviation Services.

“There is growing demand for this type of aircraft and this
type of financing,” said Anas Bennani, managing director at
Palma, adding operators are increasingly favouring operating
leases over direct financing of their fleets.

“Before it was 8 percent to 10 percent of the market, now it
is 50/50.”

In December, the venture closed a $100 million deal with
Ethiopian Airlines for the lease of four Bombardier planes, the
first sharia-compliant transaction in Africa’s aviation sector.
It followed that with a smaller deal for Kigali-based RwandAir
in March.

Sharia-compliant financing options are appealing to a wider
set of carriers as the aviation industry sees strong growth
across the Middle East, Asia and Africa.

The venture is working on additional transactions with other
firms in the region, Benanni said.

In June, Airbus Group and the Islamic Development Bank
launched an Islamic aircraft leasing fund to cater to growing
demand from Gulf airlines such as Etihad Airways and Emirates.
It closed its first deal in January.

(Reporting by Bernardo Vizcaino; Editing by Stephen Coates)

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