John Whelan: Shannon and Dublin aircraft firms tap maintenance boom

Huge backlogs at the two main manufacturers, Boeing and Airbus, means there is a lucrative trade for Irish companies in repairing older aircraft.

End on an icon: The final Boeing 747 lands at Paine Field following a test flight in Everett in Washington last month.

The last Boeing 747 jumbo jet, which was much beloved by Irish travellers to the US, rolled off the production line in Seattle at the end of January, marking the end of the old luxurious, but fuel-guzzling and large CO2-emitting aircraft. 

But the event also heralds a return to what looks like the first normal year for the aviation industry since the lifting of the global pandemic restrictions as passengers take advantage of their renewed freedom to travel. 

A recent poll by the International Air Transport Association, or IATA, reveals that many more people around the world are travelling more often than before the onset of the pandemic, despite the cost-of-living crisis. 

Orders for new aircraft from Airbus and Boeing have been coming in rapidly from airlines and leasing companies, as they seek to ramp up to meet the continued demand.  

Ireland-based AerCap, the world’s largest aircraft lessor, reported more demand for aircraft last year than at any time in its history. 

However, meeting the demand with new aircraft will be a major challenge for the two main manufacturers, as both Boeing and Airbus report huge backlogs. 

This means there is a lucrative trade for Irish companies in repairing older aircraft, with a boom in demand for jet engine repairs, leasing, and airframe refurbishment.

Rapidly expanding EirTrade, which has facilities in Rathcoole in Dublin, at Knock Airport, and in Texas, plans to start buying more older aircraft to disassemble. 

The company strips down aircraft to sell airplane parts on behalf of the aircraft owners. 

The parts are sold on to other facilities worldwide which repair older aircraft. 

Another firm is Lufthansa Technik which provides worldwide maintenance, repair, and overhaul services for aircraft. 

It has facilities in Shannon and in Dublin, and is also investing at Celbridge in Kildare to service and repair engines for airline and aviation leasing companies. 

Shannon-based aircraft repair facility Atlantic Aviation Group has been growing by acquisition at a facility in Oxford in England, while Conor McCarthy’s Dublin Aerospace has bought a maintenance operation at Exeter Airport. 

Atlantic Aviation’s extensive roster of clients include Ryanair, DHL, TUI, and Jet2. It also provides services to the world’s leading aircraft lessors, including AerCap, Avolon, and SMBC. 

Dublin Aerospace has rebranded its Exeter operation as Exeter Aerospace, and expects to employ more than 250 people there within the next three to four years.

Many other companies in the sector specialise in specific aircraft and engine types, such as Aeolus Engine Services at Citywest in Dublin. 

Overall, the dominant position of Irish-based aircraft leasing companies provides a significant source of revenue for the maintenance and repair sector here.

Each year, about 2,000 aircraft around the world are moved by leasing companies from one airline to another, which requires substantial work to meet commercial and regulatory requirements.

Irish leasing firms manage more than €100bn in assets, representing over a fifth of the world's aircraft fleet, and, impressively, over 40% of the all the world’s fleet of leased aircraft. 

Business from lessors is less predictable, since significant number of planes are returned at relatively short notice which require transitioning to another lessee. 

But such 'lumpiness' of demand is challenging for the maintenance and repair firms. 

However, the challenges are offset by the higher profit margins they generate, as deadlines for leasing firms are as critical as price. 

Industry participants expect significant growth in their businesses over the next five years.

This will be supported by the more general uptrend in the airline industry, both in Ireland and internationally, as airlines continue to benefit from pent-up demand as people take their first holidays in years and catch up with friends and family.

John Whelan is a leading expert and consultant on Irish and international trade