Aviation sector still has room to spread its wings

Aviation sector still has room to spread its wings

Aviation has an often overlooked importance for the Irish economy.

Conventional economic analysis can miss this point because it usually stems from data in large economies. Countries like Germany, the US and China have enormous land borders that dilute the critical role of aviation. On top of that these big countries have very large domestic economies that can exist independent of international trade.

In Ireland, we have a number of stand-out features which explain why aviation needs to be treated differently at a policy level.

First, we live on a relatively small island which has a high dependence on international trade for our economic well-being. Although sea ferries do operate to and from Ireland their activities are eclipsed by aviation. Second, alongside the air services operating in Ireland we have developed a world class sub-set of the financial services industry which is the largest aircraft leasing cluster in the world.

Taken together, these two factors explain why aviation is a key component of the nation’s infrastructure while it also supports a lot of high earning jobs directly and indirectly. For this reason alone policymakers have to be on their toes leading change and innovation that ensures this key industry continues to thrive as it augments the economic future of the country.

There is encouraging evidence that politicians and civil servants are alive to the challenges and opportunities that reside in aviation.

The current plans being rolled out to build an all new runway in Dublin Airport, alongside improved terminal and ramp facilities, is a case in point. While this might not garner the banner headlines attached to a giant IT company setting up a headquarters in Ireland it has even greater long-term value.

By creating the bandwidth to accommodate a much greater volume of aircraft and their passengers and freight a larger Dublin Airport helps grow the economy and, thereby, add jobs for the future.

The leasing community continues to expand, too. Despite highly charged competition from other centres Ireland continues to command investment by existing lessors adding to their fleets and new platforms being established.

Moreover, evolving tax regulations are encouraging many companies to adopt Ireland as a legitimate low tax rate centre that is respected in particular by key European, US and Asian authorities.

From such a strong base the opportunity to do much more is crystal clear. Alongside the continued development of airports and leasing entities the scope to step change another element of the aviation industry – maintenance and repair – stands out.

Although Ireland has a number of so-called MRO (maintenance, repair and overhaul) facilities it can strategically target a whole lot more. This segment is job-rich but needs a strong relationship with third level training and access to competitively-priced large hangars in order to thrive.

I observe a number of significant air fields in Ireland that are remarkably quiet compared to Dublin. While we can forever argue why that is so, a clear opportunity exists - if politicians, local councils and state agencies combine to rapidly develop a major MRO network in Knock, Shannon and Cork in particular.

This requires imaginative thinking and some forward-looking policies towards rates on facilities inside airport perimeters but it promises to unlock a lot of economic activity and jobs if handled right.

Having done so well to create a successful aviation industry in Ireland, for good economic reasons, it seems a shame to be ignoring a business that has particular potential for airports outside Dublin.

- Joe Gill is director of corporate broking with Goodbody Stockbrokers. His views are personal.

More on this topic

Ireland's per capita debt level stands at €44,365Ireland's per capita debt level stands at €44,365

Irish economy grew by 8.2% last year, figures showIrish economy grew by 8.2% last year, figures show

Sun still shining on Irish economy, but Brexit storm clouds are gathering on horizonSun still shining on Irish economy, but Brexit storm clouds are gathering on horizon

Trump’s China trade war risks hurting global economy, warns think tankTrump’s China trade war risks hurting global economy, warns think tank

More in this Section

Hong Kong protests hit Burberry but new design chief performing wellHong Kong protests hit Burberry but new design chief performing well

 99 people lost homes as €683m paid out to those impacted by tracker mortgage scandal 99 people lost homes as €683m paid out to those impacted by tracker mortgage scandal

Philip Green’s Arcadia faces legal battle over restructuringPhilip Green’s Arcadia faces legal battle over restructuring

Ryanair to slash services on aircraft delays amid Boeing 737 crisisRyanair to slash services on aircraft delays amid Boeing 737 crisis

More by this author

Cork faces some key planning decisions if goal is civic and economic core to be proud of in 20 yearsCork faces some key planning decisions if goal is civic and economic core to be proud of in 20 years

Retirement shouldn't see one's 'FIRE' burning outRetirement shouldn't see one's 'FIRE' burning out

Mercosur beef trade deal will test Ireland's diplomacy skillsMercosur beef trade deal will test Ireland's diplomacy skills

Irish vision for piloting air travel's next leap forwardIrish vision for piloting air travel's next leap forward


Lifestyle

It's hard to build a reputation in gaming, but it can be even harder to keep one.Game Tech: Dragon Quest Builders sequel builds on first outing

Fretting about doing your holiday shop with the summer sales in full swing? Who needs the hassle?Beach babe: Log on, check out and have a stress-free start to your holiday

Tea dunking is not just for cosy winter evenings. Biscuits are handy in the summer months for picnics or to keep you going on long hikes.Michelle Darmody's tricks for perfect home made biscuits

Apply sunscreen throughout the day, says Helen O’CallaghanBurning issue: Children's skin needs added protection from the sun

More From The Irish Examiner