DUBAI: Emirates, the world’s biggest airline by international traffic, needs more than $28 billion through 2017 to expand its fleet of Boeing and Airbus jets, almost double the amount raised since 1996.

Financing requirements for the 12 months through March 2011 will be $1.3 billion, and total about $27 billion for the following six years, Gary Chapman, Emirates’ president of group services in charge of finances, said in an interview in Dubai.

Emirates, which will take delivery of two aircraft each month for the next six years, operates a fleet of 150 jets and has firm commitments for a further 203 planes.

The carrier, which is building up a fleet of 90 Airbus A380 aircraft with 45,000 seats, is using its base in Dubai to create a global network to compete with Singapore Airlines Ltd., Air France-KLM Group and Deutsche Lufthansa AG. “With the activity that we have coming up, we’ve got to leave no stone unturned,” Chapman said from his office overlooking Dubai International Airport.

Since starting operations 25 years ago, government-owned Emirates has raised $21.6 billion to finance its expansion, according to the carrier’s web site. It has done this via operating leases, export credit agencies, commercial asset-backed debt and non-conventional sources such as Islamic funding.

The airline is looking at enhanced equipment trust certificates, a debt instrument that allows a carrier to take possession of an asset and pay for it over time, the executive said. “In an ideal world we’d like to get about 85 per cent financing” from debt and the remainder from equity, he said. About $30 billion of debt from Gulf-based companies will mature in 2012 and needs to be refinanced, according to Moody’s Investors Service. Of this, UAE entities make up two thirds.

“It could be quite a crowded time for Emirates to get funding,” said Khalid Howladar, a Dubai-based senior analyst at Moody’s.

Emirates may repay some bonds or look at rescheduling them depending on financing costs, Chapman said. It has about $5.3 billion of outstanding debt, including a $500 million bond arranged by HSBC Holdings that’s due in March and a $250 million bond due in June next year, according to the carrier’s financial statements.

Emirates doesn’t have a debt rating.”We’re looking at our options, but you have to set it against the fact that we’re sitting on a cash pile of about $3.4 billion,” he said.

“We have the flexibility. We’re not going to be pushed into a corner.” Dubai World on May 20 reached an agreement with its creditors to restructure $23.5 billion of loans. The company’s announcement on Nov. 25 to delay repaying loans sparked a plunge in stocks around the world and the largest increase in emerging market bond yields over US Treasuries in four weeks. The cost to protect against a default by Dubai doubled.

Bloomberg