Aviation finance is flying high
Education is the wind beneath the wings of Ireland’s world-class aviation finance sector
Thomas Conlon, academic director for the MSc Aviation Finance at UCD’s Smurfit Graduate Business School: “Ireland has the skilled resources that the aviation sector needs.”
The Irish Aviation Authority website describes Ireland as “the Centre of the Global Aviation Industry” and, for once, it’s not a case of corporate over-egging. It’s a sentiment Ireland has every right to lay claim to, thanks to a high-flying history.
Ireland’s success in corporate aviation, and aircraft leasing in particular, is often credited to the pioneering impact of Guinness Peat Aviation (GPA), the late Tony Ryan-led enterprise credited with having invented aircraft leasing in the 1970s.
A more visible part of the late entrepreneur’s legacy is of course Ryanair, now one of the world’s largest airlines, with more than 130 million passengers annually.
But it is in the niche speciality of air finance that the country’s performance is truly exceptional. Ireland is a global hub for the leasing and finance of aircraft, with nine of the world’s top 10 lessors not just having a presence, but headquartered here.
More than half of the world’s leased fleet is managed out of Ireland, with an Irish-leased aircraft estimated to take off somewhere in the world every two seconds.
Ireland’s low corporate tax regime and extensive double-tax treaty network have long been credited with underpinning the aviation finance sector here, complemented by the treatment of tax depreciation too.
But non-tax reasons are also a critical factor in the decision to locate here. Top of these is the skills base that Ireland can present right across the aviation sector, including finance, legal, operational and technical skills.
It’s a skills base that is being actively cultivated thanks to a significant growth in the number of aviation-related courses on offer at both undergraduate and graduate level, by institutions such as UCD, DCU and Carlow Institute of Technology.
“Education is fundamental to the success of this sector,” says Thomas Conlon, academic director for the MSc Aviation Finance at UCD’s Smurfit Graduate Business School.
“We have a lot of businesses coming to Ireland for tax reasons but in aviation while it is about double-tax treaties, the other side of it is the people. Ireland has the skilled resources that the aviation sector needs. I really think they cannot get these people elsewhere.”
Singapore and Hong Kong are trying “to scale their flight paths to catch up,” says Conlon, “but they are nowhere near where we are in relation to aviation finance. We have had a head start. It’s why we have such significant demand for our masters degree from Asia, India, the US and Canada. People are coming to Ireland to undertake this course.”
Its programme is the only MSc Aviation Finance degree in Europe. The only other place in the world where students can find a degree like it is Embry-Riddle Aeronautical University in Daytona Beach, Florida.
The course was set up in response to demand from a growing sector for a strong skills pipeline, particularly at leadership level. “The industry came to us and asked us to set up the masters programme because they needed a stream of new people to lead the industry into the future,” says Conlon.
The programme accepts students from a variety of backgrounds, including graduates of commerce and engineering. It covers a specific range of aviation-related skills as well as modules on negotiations, law and economics.
Boeing predicts that $6.3 trillion of aircraft is going to be needed over the next 20 years. Of those, 50 per cent will be leased, and 60 per cent of those will be leased from Ireland
“Boeing predicts that $6.3 trillion of aircraft is going to be needed over the next 20 years. Of those, 50 per cent will be leased, and 60 per cent of those will be leased from Ireland,” says Conlon. “That’s why we are seeing huge growth in interest from candidates.”
DCU offers a BSC in Aviation Management. It is the first university degree in Ireland to combine management studies with the option to train as a commercial pilot. It too has been designed in consultation with major aviation industry employers, including major Irish airlines.
It aims to provide a broad insight into all aspects of the structures, operations and management of the aviation industry.
DCU also offers an MSc in Management (Aviation Leadership), a specialist postgraduate programme designed to provide participants with aviation knowledge in all key aviation sectors combined with an education in strategic management.
Carlow Institute of Technology offers a Bachelor of Business (Hons) in Aviation Management. Carlow is known too for its aerospace engineering courses – it has its own hangar.
“One of the reasons these aviation-specific degrees are starting to appear is because the sector is growing so much,” says Andy MacIntyre, adjunct professor for Aviation Management, DCU.
“In the old days, people entered the sector directly, did their time and rose up through the ranks via experience. More and more companies require graduates and postgraduates now.”
Demand for new aircraft is rising. “An estimated 31,000 commercial aircraft were required in 2017, up 4 per cent on the previous year. More than 1,700 new aircraft were ordered that year, with 17,000 new aircraft estimated to be ordered globally over the next decade,” he says.
Passenger numbers are predicted to double by 2030, to 73 million, with growth mainly driven by the Asian market. “Globally, aviation is expanding rapidly,” says MacIntyre. Though a geopolitical shock will always have the power to stall the sector temporarily, “at the moment all the graphs are going upwards”.
DCU launched its programmes in anticipation of the current boom. “Our graduates are very much in demand,” says MacIntyre.
“We noticed the demand in 2007 and 2008, and decided what better way to approach it than by providing a business management degree that specialised in aviation – aviation management with pilot studies.”
The course took off in 2010, right into the turbulence of recession. “The recession did cause a blip, but the timing was good in that by the time our first students were graduating, in 2014, the market had picked back up and our students have been in demand ever since.”?
A major part of their attractiveness to employers is down to the eight-month industry placement that takes place as part of the course. “From year one to year three, all students study together. In year four they split, with some going to take a pilot training course that counts as part of their final year. They then all graduate from DCU.”
Pilot studies are paid for in addition to the degree course, and can typically cost in excess of €75,000. Among the best-known options are Oxford in the UK, Jerez in Spain, and two in Ireland, the National Flight Centre in Kildare and Atlantic Flight Training Academy in Cork.
Regardless of which stream they opt for, DCU’s aviation graduates are typically “snapped up”, MacIntyre says. “It’s because of the success of the undergraduate course that three years ago we launched the postgraduate masters programme,” he says. This is aimed at those already within the industry, typically at middle-management level, helping to develop the leaders of the future.
Ireland has always punched above its weight in relation to aviation, long before Tony Ryan, says MacIntyre, pointing out that aviator Charles Lindbergh had Irish links while Alcock and Brown’s pioneering transatlantic flight will be forever associated with Galway.
“Ireland is the last outpost in Europe. When trying to conquer the Atlantic, it was key – you’d take off and land here. Indeed, the first time the Atlantic was crossed east to west in 1928, it was done by two Germans and an Irishman called Fitzmaurice.”
Though it was an accident of geography that established Ireland as a centre for aviation early on, it’s a flight path we have maintained.
“Today, we have Willie Walsh heading up IAG, Alan Joyce heading up Qantas and Michael O’Leary heading up Ryanair,” says MacIntyre. “We have a huge history right up to the present day of being at the centre of aviation.”
If our third-level providers have anything to do with it, that’s right where we’ll stay.