Etihad Airways said to plan debt sale as partners struggle

Etihad Airways has hired banks for a potential Islamic bond sale, according to people familiar with the matter. The third-biggest airline in the six-nation Gulf Cooperation Council mandated banks including HSBC Holdings Plc, National Bank of Abu Dhabi PJSC and Dubai Islamic Bank PJSC for the offering, said the people, who asked not to be identified because the information isn’t public. The Abu Dhabi-based carrier’s sukuk is expected by the end of the year, they said. The sale plan comes as Etihad’s equity partners in Europe grapple with overcapacity, shrinking travel demand and mounting competition. Air Berlin, in which the Abu Dhabi carrier has a 29% stake, last month announced the closing of its Hamburg base and five others in Germany as it halves it fleet and cuts 1,200 jobs. It’s been bailed out by the state-owned Gulf airline as it racked up E1b of net losses in the past three years. Etihad last-year raised $700m via a five-year bond with partners including Air Berlin and Alitalia. The group sold a further $500m bond in May. Etihad is rated A by Fitch Ratings, the sixth-highest investment grade.<br/>