Slattery refuses to let downturn clip his wings

IRISH AVIATION leasing executive John Slattery is not letting the global credit crunch clip his wings.

The Co Clare businessman, brother of Claret Capital’s Dómhnal Slattery, announced at the Paris Air Show this week that he has raised $100 million (€72 million) in equity for a Dublin-based company called GreenStone Aviation, which is set to take off in the midst of the worst downturn anybody in the aviation industry can recall.

The funds have been committed by Jefferies Capital Partners in New York.

A bit like Ryanair’s Michael O’Leary, Slattery sees it as the perfect time to launch an aircraft leasing company. In essence, he plans to buy aircraft from airlines and then lease them back to the companies.

According to Slattery, $68 billion worth of aircraft is due to be delivered to airlines this year. He is hoping the credit crunch will see him pick up some relative bargains, largely Boeing 737s and Airbus A320 aircraft.

“It’s all about exercising discipline to acquire the right assets at a good time in the cycle,” Slattery told me this week.

Slattery reckons the aviation industry goes through eight-year cycles from peak to peak. He left RBS Aviation Capital in June 2007, which he believes was the peak in the market.

“We’re probably six months away from the trough of the current cycle and my suspicion is that it will be in that trough for about 24 months.”

Slattery, also a director and investor in JetBird, the Dublin-based low-cost executive jet operator set up by his brother, says he plans to raise about $500 million in equity by the end of 2010, which, with leverage, will give him a war chest of about $2.5 billion for aircraft deals.

“We’re in due diligence at the moment with private equity houses,” he told me.

Ireland is something of a hotbed for aircraft leasing – a legacy from Tony Ryan’s GPA in Shannon and our low corporate tax base. RBS, Awas and Babcock Brown Air, which is led by Aer Lingus chairman Colm Barrington, are all based here.

Slattery, who is himself 13 years in the aviation leasing business, hopes to have 30 senior people employed here, with offices in New York, Beijing, Singapore and Dubai.

Given the current economic malaise, it is nice to see somebody taking a bet on the future. Slattery will need a fair wind at his back to pull it off.