RBS to provide finance for $50m aircraft deal

DUBAI — National Air Services (NAS) Saudi Arabia, the Riyadh-based provider of aviation services in the Middle East, yesterday announced that it is purchasing two Gulfstream IV-SP aircraft valued at more than $50 million.

By Lucia Dore (Senior Correspondent)

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Published: Thu 1 Feb 2007, 8:42 AM

Last updated: Sat 4 Apr 2015, 9:45 PM

The Royal Bank of Scotland (RBS), one of the world's top 10 banks, is financing the deal by way of a seven-year finance lease — a form of debt financing that means NAS owns the aircraft at the end of the lease period. The announcement was made at the first annual MEBA conference and exhibition in Dubai.

Last year NAS, the largest and fastest growing private aviation business in the Middle East, announced it would be launching a low-cost airline, NAS Air. NAS was awarded the licence to become the first national air transport company to operate scheduled flights from the capital Riyadh to all domestic destinations in December. NAS CEO Taher Agueel, whose vision is for the company to "become a leading aviation provider", said the first flight is scheduled soon and that "we are working day and night to make this happen."

He also said the company would be purchasing 19 aircraft — to seat between 160 and 180 — in a "matter of weeks", and that a combination of debt and equity financing would be used to finance the deals. The airline is also "eyeing an IPO in 2008", and recently did a private placement to raise equity, said Aqueel, speaking on the sidelines.

And speaking about the type of terminal facilities in Saudi Arabia he commented: "We hope to see the type of terminal that will enable us to operate a budget airline efficiently."

Donal Boylan, head of RBS Aerospace and Defence, which includes the corporate aircraft and superyacht financing business, said the opportunities for financing executive aircraft in the Middle East were significant. "RBS has already demonstrated its commitment to corporate and VIP aviation in the region, with a number of aircraft financed and several others in the pipeline. Both NAS and RBS expect this market to grow significantly over the next five years and, by working together, we look forward to enjoying an important share of that growth," he said.

RBS entered the business aviation sector in 2001 when the aviation industry was in the doldrums and other banks were not prepared to provide finance. This made it possible to buy aircraft cheaply and to gain a foothold in the Middle East explained Boylan - a market fundamentally different from other legacy market, he said. He also commented that the bank saw itself as "fundamentally a provider of aviation capital rather than just aircraft".

As part of its international growth strategy, RBS is opening four offices in the region, including Abu Dhabi and Dubai. The bank is ranked number one in the Middle East in project and export finance, and is a global leader in this category as well as in asset finance. Worldwide, RBS holds the number one, two and three positions, respectively, in rail locomotive leasing, commercial shipping and commercial airliner financing. Since the establishment of the business aviation division in 2001, with an initial capital injection of $3 billion, the assets have grown four-fold to reach $12 billion.

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