Sukuk: A ‘new’ option of aircraft financing

Several airlines have indicated that they are exploring the possibilities of financing new fleet acquisitions and expansion through the issuance of sukuk or other suitable Shariah-compliant financing instruments. Bankers in the UAE and Malaysia stress that sukuk are ideal for the airline and aviation industry because of the match between the long-term nature of the assets with a regular income stream from passenger traffic. However, aviation finance industry experts emphasize that sukuk is not necessarily a better option, it is simply a different option to find a source of financing.

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