Recovery on the horizon for Irish aviation but challenges remain
Ireland has a sophisticated aviation finance ecosystem that combines experience, expertise and a business-friendly environment, all of which will be vital to recovery. But there are challenges too.
“Ireland remains the centre of the world for aircraft leasing. Talent, track record and the corporate tax environment are key for us maintaining our competitive advantage. Given it’s a mobile asset class, the personal tax regimes on offer in the likes of Singapore and Hong Kong are a concern, but to date we have not seen those jurisdictions take market share from Ireland,” says Joe O’Mara, head of aviation finance at KPMG.
As a global sector it is subject to global macro-economic trends. “While it clearly demonstrated exceptional resilience during the pandemic, additional pressures of fuel prices and the invasion of Ukraine could well be negative to the sector,” according to his colleague Kieran O’Brien, head of aviation finance advisory at KPMG.
He does not believe that events of the past two years will have a negative impact in the long term.
“Given the resilience the sector has shown we don’t believe the sector has lost any sheen, it still attracts top talent and provides employees with the real ability to lead world-class companies from Ireland. Given the additional opportunities for growth and to lead real innovation in the sector it shows no sign of changing soon,” explains O’Brien.
Indeed, as international travel rebounds, there are opportunities on the horizon.
“There is no doubt that the growing ESG sustainability agenda will be impactful on all sectors and in particularly on aviation. However it does offer opportunities for the sector and Ireland. We have the opportunity to take a leading position in sustainable aviation fuel and the sector as a whole is looking at further innovation in efficient technology, electric and hydrogen-based engines, as well as vertical take-off and e-taxis, as some lessors have already done,” he adds.
Pictured: Dr. Thomas Conlon, Associate Professor of Banking and Finance in the UCD School of Business
If Ireland is to keep up with such innovations, strengthening its skills base will be critically important.
Happily Ireland’s third-level sector is one of the main pillars supporting the sector. Those looking to forge a career here have a number of courses open to them at institutions such as Dublin City University, University of Limerick and Carlow Institute of Technology.
University College Dublin’s master of science degree in aviation finance is, for example, the only degree of its kind in Europe and is supported by leading aircraft leasing companies through internships, scholarships and research projects.
According to its founding academic director, Tom Conlon, Ireland is well placed to retain its position as a global centre of excellence. However, “One of the challenges it faces is the cost of living. It’s very expensive to live in Ireland, and this is very much an international business,” he points out.
It’s also very much a specialist industry, he points out. “To compete, the industry needs to be constantly developing talent. We need to keep expanding the education offering and upskilling the industry.”
This article first published in the Irish Times 12 May 2022. Read the full article here.
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