Aircraft leasing worth more than €500m to Irish economy
New report highlights how the sector supports almost 5,000 jobs in the Republic
Peter Barrett, chief executive of SMBC Aviation Capital, who will attend this week’s Global Airfinance conference in Dublin. Photograph: Brenda Fitzsimons
Aircraft leasing is worth more than €500 million to the Republic’s economy and supports almost 5,000 jobs, a report published on the eve of a major industry conference shows.
Key figures in aviation and aircraft leasing will gather in Dublin this week for the Global Airfinance conference, including Alec Burger, chief executive of GE Capital Aviation Services (GECAS), Peter Barrett of SMBC and Amelia Anderson, American Airlines managing director, assistant treasurer.
A report by accountants PwC, Taking Flight – 2018, shows that the industry supports 4,970 jobs, including 1,700 directly, spends €541 million here and contributes a further €90 million in payroll-related tax to the exchequer.
The Republic, particularly Dublin, is a centre for the industry. Several of the top 10 players are based here, including Aercap, GECAS, SMBC and Avolon. They combine their own cash with bank loans to buy aircraft from manufacturers such as Boeing and Airbus, which they then lease to airlines.
Brian Leonard, the PwC tax partner who wrote the report, said that along with the 1,700 people working for these firms, leasing was responsible for more than 3,200 jobs in law, accountancy and other areas that support the industry.
“It’s a very outsourced model,” he said. “Accountants and lawyers and other advisers that are not directly hired by the lessors work for and support them on an ongoing basis.”
He acknowledged that this spread to other areas such as aircraft maintenance.
The availability of those skills, the Republic’s tax regime, including tax treaties with other countries, its legal system and regulations help make it what Mr Leonard called a “natural home” for the industry.
However, industry figures to whom PwC spoke when it was researching the report warned that other nations were vying with the Republic for this business.
“The headline risk that they flagged to us was competition from other jurisdictions that are seeking to replicate the Irish regime,” Mr Leonard said.
He pointed out that within the last year Hong Kong introduced incentives aimed at luring aviation lessors there. Mr Leonard said that expanding the Republic’s tax treaties to include countries such as Indonesia, where demand for aircraft is growing, would help combat this.
Yvonne Thompson, leader of PWC Ireland’s aviation finance practice, warned that the Republic’s high personal tax regime and housing squeeze posed “real challenges” for the sector.
Launching the report, Paschal Donohoe, the Minister for Finance, pledged that the Government would continue to act to ensure the Republic remained a leading centre for aircraft lessors.
“The aviation sector in Ireland continues to grow and to be a significant contributor to the Irish economy in terms of the number of jobs created, the amount of revenue generated, and, of course, the knock-on effects for the economy generally.”