Emirates Airline’s notes have risen in the past month, regaining an advantage they enjoyed over Dubai’s sovereign bonds as the world’s biggest international carrier benefits from rising tourism and falling oil prices. The extra yield investors demand to hold Dubai government’s 6.7 percent bond due 2015 over the Emirates’ note widened to 16 basis points on Wednesday from a discount of 22 basis points on August 4, according to data compiled by Bloomberg. The yield on the Dubai-owned airline’s 5.125 percent bond due 2016 fell 21 basis points, or 0.21 of a percentage point, to 5.28 percent on Wednesday since reaching a record 5.49 percent on August 11.“The fundamental drivers for Emirates have improved,” Ahmad Alanani, the Dubai-based head of fixed-income sales for the Middle East at investment bank Exotix Ltd, said in an interview. “The number of travellers going through Dubai Airport have hit a record high” and oil prices have dropped, he said. Emirates’ earnings in the year to March surged 43 percent to a record AED5.93bn ($1.6bn) as it attracted more passengers using a growing fleet of Airbus SAS A380s. The Arab world’s biggest carrier is building the largest superjumbo fleet as it seeks to establish Dubai as an intercontinental travel hub and win passengers from Air France-KLM Group, British Airways and Deutsche Lufthansa AG. It also competes with regional rivals Qatar Airways and Abu Dhabi’s Etihad. Dubai International Airport, home to Emirates airline, handled a record number of passengers in July. The number of travellers rose to 4.7 million from 4.3 million a year ago. The number of passengers Emirates carried jumped 14 percent to 31.4 million in the 12 months to March.At the same time, fuel is becoming cheaper. Oil tumbled 6.8 percent this quarter and was trading at $88.94 a barrel as of 7:10 pm on Wednesday in Dubai. Fuel made up 34 percent of the airlines’ costs in the past fiscal year, according to its annual report. The United Arab Emirates, which Dubai and Abu Dhabi are a part of, holds about seven percent of the world’s proven crude oil reserves. Emirates’ bonds have mostly traded higher than Dubai government’s 2015 security since being sold in June, except between July 28 and August 22. That’s expected to continue since the airline’s “not likely to come back to the market any time soon,” while Dubai “is likely to be an ongoing issuer when market conditions allow,” said Abdul Kadir Hussain, who helps oversee $2bn in fixed-income assets as chief executive officer at Mashreq Capital DIFC Ltd in Dubai. From / Arabian Business News