Airbus and Islamic finance

Thomas Lifson
It is no secret that Airbus has sold a lot of airliners to Islamic countries. Emirates Airlines of Dubai is by far the dominant customer for the A380 superjumbo jet, most famously, and the possibility of a major Arab investment entities taking an equity position in the firm has been discussed.

Now comes news that Airbus is negotiating to set up a Sharia-compliant leasing arm to enable Islamic carriers to finance their Airbus purchases without paying something labeled "interest", the charging of which is forbidden by the Quran.

Investment Dar, the Airbus partner in this venture, has been around over a decade, structuring transactions to maintain the fiction that no interest is being charged. The same amount of money is funneled to same parties, but it can be called acapital gain or service fee, or some other words that avoid the eternal proscription on interest payments.

Selling 21st century aircraft observing 7th century customs as the disguise for modern financial transactions.

Hat tip: Airliners.net  

It is no secret that Airbus has sold a lot of airliners to Islamic countries. Emirates Airlines of Dubai is by far the dominant customer for the A380 superjumbo jet, most famously, and the possibility of a major Arab investment entities taking an equity position in the firm has been discussed.

Now comes news that Airbus is negotiating to set up a Sharia-compliant leasing arm to enable Islamic carriers to finance their Airbus purchases without paying something labeled "interest", the charging of which is forbidden by the Quran.

Investment Dar, the Airbus partner in this venture, has been around over a decade, structuring transactions to maintain the fiction that no interest is being charged. The same amount of money is funneled to same parties, but it can be called acapital gain or service fee, or some other words that avoid the eternal proscription on interest payments.

Selling 21st century aircraft observing 7th century customs as the disguise for modern financial transactions.

Hat tip: Airliners.net