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IAFC said to seek US$1b for Saudia Airbus jets

[DUBAI] International AirFinance Corp Ltd is seeking to raise about US$1 billion in loans to fund the purchase of 18 Airbus Group SE planes to be leased to Saudi Arabian Airlines, the kingdom's state-owned carrier, according to people with knowledge of the plan.

IAFC sent requests to banks for the loan for Airbus A330 and A320 models, said the people, asking not to be identified because the information is private. A spokesman for IAFC declined to comment. A spokesman for Saudia didn't respond to calls and an e-mail seeking comment.

Saudia, as the airline is known, ordered 20 A330-300 Regional planes and 30 A320s at the Paris Airshow last year as part of plans to almost double the fleet to 200 by 2020. The carrier is seeking to increase capacity domestically and access new international routes as competition at home intensifies.

Saudia also plans to raise between 3 billion riyals (S$1.1 billion) and 5 billion riyals from the sale of sukuk in the second quarter to refinance loans and fund plane purchases, Director General Saleh Al Jasser said Jan 22.

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Middle East airlines including Emirates, Etihad Airways PJSC and Qatar Airways Ltd have been some of the biggest buyers of planes globally as they seek to use their location to win inter-continental traffic between Europe and Asia.