John Daly discusses Ireland’s role in the global aviation services sector with John Ludden of GECAS.
Gecas — or GE Capital Aviation Services — is an Irish-American commercial aviation financing and leasing company.
Gecas, a subsidiary of GE Capital (the finance arm of the General Electric conglomerate), the company was first established in the Shannon Free Zone in 1993 and is located in a 70,000 sq ft office premises at Westpark business campus.
It offers a wide range of aircraft types and financing options, including operating leases and secured debt financing, and also provides productivity solutions such as spare engine leasing, spare parts financing, and management.
“Ireland is the global hub of aircraft leasing, generally speaking, with more than 50 companies based here,” says John Ludden, Gecas executive vice-president and general counsel.
Gecas has more than 575 employees and 26 offices worldwide, with the larger of the company’s two global headquarters located in Shannon.
It has a fleet of over 1,850, comprised of 1500 planes and 350 helicopters, servicing more than 250 customers in over 75 countries.
John Ludden added: “Most of our workforce is based in Shannon, and we are very proud of our origins and history in Ireland — and which offers a great environment from which to do business.
"Ireland has a great pool of talent, a robust legal system, a very comprehensive treaty network, and a low corporate tax rate — all factors which really are very attractive to this type of business.”
Mr Ludden joined Gecas in 1996 at Shannon, gaining a range of experiences in a broad spectrum of Gecas transactions.
He subsequently relocated to the company’s Dubai office, leading the Gecas Emerging Markets legal team, before returning to Shannon in 2015 to assume the role of General Counsel of Gecas.
Prior to joining Gecas, he qualified as a lawyer in Liverpool, and worked in private practice specialising in aircraft financing based in London and in company law in Bermuda.
While Ireland has stolen a significant march on other territories in establishing this flourishing economic sector, continual investment and nurturing of future talent is vital to sustaining its success.
“We will continue to work with the Government to ensure that Ireland remains a very attractive place to do business, and we are very mindful of the need to invest in education to keep that pipeline of talent coming through,” he says.
Gecas has established a strong partnership with the University of Limerick, and brings in 20 students annually to the company’s offices at Shannon in a variety of functions.
“This gives us an opportunity to look at this great young talent and offer them the chance to see whether this is an industry in which they would like to pursue their careers in,” he says.
“Indeed, we have a significant number of Gecas employees who were formerly students here.”
In 2019, Gecas and the University of Limerick School of Engineering launched the annual Women in Aviation Scholarship this year to help drive increased engagement by female students in Aeronautical Engineering.
Ciara Hurley from Cloyne, Co Cork, is the first recipient of the award.
Gecas will provide the Scholarship each year to one qualifying first-year female student of the UL Bachelor of Aeronautical Engineering course.
Ciara will be awarded a €5,000 bursary for each year of her studies, meaning a total of €20,000 will be granted to her by the time of her graduation.
“There was a general recognition within the aviation industry around the lack of female talent, and we were very keen to increase this talent, particularly in the engineering space,” John explained.
“We are committed to investing €20,000 each year in this scholarship programme in recognition of helping diverse talent coming through, because we recognise the value that brings to an organisation.”
Gecas was also amongst a number of companies to develop an MSc in Aviation Finance at the UCD Smurfit Graduate Business School.
Suitable for graduates from a wide variety of disciplines including business, economics, finance, engineering, and science who want to pursue a career in the dynamic sector of aviation finance and leasing, it is the only MSc Aviation Finance Degree in Europe, and is supported through internships, scholarships, and research projects.
Also in 2019, Gecas launched the first ever Aerovate aviation innovation competition, challenging students to foster ideas that will help revolutionise the world of aviation, and which have the potential to develop into a real-life business opportunity.
Callum Winship, who is a third-year student of Aeronautical Engineering, won the top prize of €5,000 for his innovative submission, AeroZero.
Callum’s initiative proposed to lower the net carbon emissions produced by aviation through offsets generated by a not-for-profit organisation.
This organisation, AeroZero, would in turn be responsible for producing and investing in green energy technology that could then be returned to the grid.
“It’s a privilege to be invited to share new concepts with the likes of Gecas,” Callum said.
“Being selected as the winner gives me confidence not only is AeroZero a credible concept, but one that lessors might be able to put into effect, promoting carbon efficiencies and green technologies.”
Since Guinness Peat Aviation started a leasing business in the 1970s, Ireland’s offering in the sector has grown hugely.
In 2020, Ireland is now the global centre for aviation finance and aircraft leasing.
Over 50 aircraft leasing companies are based in Ireland, including Aercap, SMBC, Pembroke Capital, Awas Capital and Avolon.
Around the world an Irish-leased aircraft takes off every two seconds, and over 60% of all leased aircraft worldwide are managed by Irish-based leasing companies.
A 2018 study by PwC noted Ireland’s “stable and competitive headline rate of corporation tax together with a tax depreciation write-off period of eight years.”
The number of aircraft assets rose 36% between 2012 and 2016, with projected growth of 22% between 2016 and 2021.
It found that the sector contributed €660m to the economy in 2016 and supported almost 5,000 jobs.