Ireland is the leading centre for aircraft leasing worldwide, with a 65 per cent share of the global market. More than 50 aircraft leasing companies are based here, including 14 of the world’s top 15 lessors. It is estimated that an Irish-leased aircraft takes off somewhere in the world every two seconds.
It’s a high-flying performance for an industry that only grew wings thanks to a young Aer Lingus executive called Tony Ryan, who found a novel use for a new aircraft which the airline no longer required. Ireland’s aircraft leasing industry can be traced back to the establishment of Guinness Peat Aviation (GPA) in Shannon by Ryan in 1975.
“The amazing story of how Ireland has been a leader globally in aircraft leasing is more well known now than when I started in the industry 20 years ago, but it is still of great interest and a fascinating success story,” says Marie O’Brien, partner and head of aviation and transport finance at A&L Goodbody.
“The qualities of innovation, hard work and entrepreneurship that Tony Ryan embodied when he set up GPA as an aircraft leasing company are the same qualities that Ireland and the talented aircraft leasing community bring to ensure Ireland is the undisputed centre of this industry.”
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The basic premise of the aircraft leasing industry is that airlines need flexibility in their fleet to respond to passenger demand, manage cash flow and ensure they have access to the best and safest aircraft.
“Tony Ryan recognised this opportunity and understood that an ideal solution was for airlines to lease a percentage of their fleet rather than owning them,” O’Brien explains.
Leasing is now the preferred option for airlines over buying, having risen from roughly 10 per cent of the total fleet in the 1970s to 58 per cent at the end of 2023.
The most spectacular increase occurred between 1980 and 2010, and the share first crossed the 50 per cent mark in 2004, according to the International Air Transport Association (IATA).
In recent years, the figure has stabilised at around the 60 per cent level, which, IATA suggests, appears to be “the optimal” split between leasing and owning.
GPA attracted a deep pool of talented people to develop what was an exciting new industry.
“Ireland’s stable political, legal and economic environment created a stable base and, combined with its excellent highly educated workforce, meant that it became the location of choice for leasing companies. Many of the GPA alumni worked in various roles globally and spread the word about the opportunities this industry offered. We are now seeing the next generation of leaders shine and the future is bright,” says O’Brien.
“The fundamentals in aviation are strong – people want to fly and investors and financial institutions see it as a strong and stable investment opportunity. The demand for aircraft was strong last year and, matched with the availability of capital, meant that the leasing companies had a successful year. There is a strong pipeline of deals already in place for 2025 and although global dynamics will always play a part, there is confidence that the market will be strong this year.”
For Ireland, aircraft leasing has been an exceptional success.
“Where we are is a very rare place for Ireland to be in any sector – that is, the number one, the biggest, the most important,” says John Cotter, professor in finance and chair in quantitative finance at University College Dublin.
While in sectors such as IT or life sciences Ireland can rightly boast that it is home to some of the biggest names in the world, with aviation finance Ireland doesn’t just play host to industry giants such as AerCap, SMBC Aviation Capital and Avolon – actual industry decision making takes place here, he points out. That is not the case in other sectors.
It puts Ireland centre stage as the industry gets to grips with its biggest challenge – environmental impact. One of the ways this is playing out is in the move to narrow-body, single-aisle craft which allow for lower emissions and slightly longer journey times. This is enabling more direct flights, reducing reliance on hubs for onward travel and consequently cutting the number of fuel-burning take-offs.
“Instead of going from A to B to C, increasingly you can go direct from A to C,” Cotter explains.
The development of comprehensive education programmes has been vital in keeping Ireland’s aviation sector cruising at high altitude. As the only degree of its kind in Europe, UCD’s MSc in Aviation Finance is a case in point. The university has also launched an executive diploma in aviation finance, aimed at mid-to-senior managers and leaders in the industry.
Industry-supported apprenticeships also ensure the continued supply of an appropriately skilled workforce. But we can’t afford to throttle back.
“The recently published Expert Group on Future Skills Needs report forecasts aircraft leasing and finance to have the highest estimated growth across the sub-sectors of Ireland’s financial services sectors. However, to sustain the critical role of aircraft leasing in enhancing global connectivity and driving economic growth, the industry must ensure access to a workforce equipped with the necessary skills, qualifications, and training programmes in both financial and technical expertise,” says Elizabeth Bowen, director of Aircraft Leasing Ireland (ALI), an Ibec group.
Sustainability is a prerequisite for the sector’s continued long-term growth and success, she points out. ALI launched its Sustainability Charter in October 2022, based on the aviation industry’s ambition to achieving net zero in 2050.
“Aircraft lessors support the transitioning of the world’s fleet to the newest technology and most fuel-efficient fleet through their financing activities. This is the most impactful near-term action that can be taken by the industry to reduce aviation’s carbon impact. They are also supporting research that could lead to more radical decarbonisation of aviation through hydrogen and electric-powered flight,” says Bowen.
“Like every industry, there will be challenges; however, through our actions, engagements and advocacy ALI and its members will continue to focus on sustainability and drive for the reduction in carbon emissions across the aviation industry.”
