The European Investment Bank (EIB), the long-term financing institution of the European Union (EU), announces a loan of USD 158m (some ESP 23 billion)(1) towards modernising IBERIA's long-haul fleet. The proceeds of this finance will go towards the acquisition of two A340 - 300 Airbuses. The Spanish airline covers a large number of long-distance routes, mainly to Central and South America where it enjoys a significant share of the world market.
The loan has been made available to IBERBUS LTD, an IBERIA/AIRBUS joint venture set up for the purposes of this acquisition in the form of a leasing operation mounted in conjunction with a banking syndicate.
The two new Airbuses will have a positive effect on the Spanish airline's profitability inasmuch as these aircraft will consume considerably less fuel than those which they are replacing. The A340 - 300 will also be more environmentally friendly by virtue of lower sound and atmospheric pollution levels. IBERIA's decision to choose the AIRBUS A340, after weighing up a variety of options, highlights this company's support for Europe's aeronautical industry.
The EIB was created in 1958 by the Treaty of Rome establishing the European Economic Community. Its task is to contribute to integration, balanced development and economic and social cohesion within the Member Countries of the Union by means of long-term financing for capital investment designed to attain EU objectives. More particularly, the EIB backs viable projects promoting: development of the disadvantaged regions of the Union; construction of trans-European transport, telecommunications and energy networks; increased international competitiveness and integration of European industry, especially in the case of SMEs; protection and enhancement of the environment; and security of energy supplies within the Union. Subject to certain limits, the EIB also provides financing outside the European Union pursuant to the latter's policy of cooperation with third countries. Owned by EU Member States, the EIB funds its lending operations through borrowings raised on the capital markets where its bond issues systematically enjoy the top AAA rating.
(1) The conversion rates used by the EIB for statistical purposes during the current quarter are those obtaining on 30 June 1997, when ECU 1 = GBP 0.68, IEP 0.75, USD 1.13 and ESP 166.486.