DUBAI: Emirates, the fast expanding Gulf airline, may seek to refinance a $550 million Islamic bond maturing in June but has not ruled out repayment in cash, a senior executive said on Tuesday.

“We are currently considering whether to refinance, and by what product. Cash flow is good and we have the ability to repay if we decide,” Brian Jeffery, senior vice president, corporate treasury told reporters in Dubai.

Emirates' cash balance stood at 15.6 billion dirhams ($4.25 billion) as of March 31, 2012.

The $550 million sukuk maturing on June 16, was trading at 98 levels on Tuesday.

When asked if the airline would refinance the bond with another sukuk issue, Jeffrey said, “The price differential would need to be significant, given our financing programme and other priorities.”

Earlier this month Emirates, which is among the 10 biggest airlines in the world by passenger numbers, reported a 72 per cent drop in net profits last year following a steep rise in fuel costs.

The ability of regional borrowers to refinance upcoming debt has been in focus as European banks, behind much of the loan activity in the Gulf in recent years, pull back as a result of funding pressures created by the Euro zone crisis.

But while Western banks have stepped back from lending into the region local banks are playing a bigger role in addressing the Gulf's refinancing needs.