Aviation leasing industry contributes €541 million to economy, supporting 5000 jobs

22 January, 2018

Start adding items to your reading lists:
or
Save this item to:
This item has been saved to your reading list.

'Taking flight 2018: An economic and employment analysis of the aviation leasing industry in Ireland' are (l-r): Brian Leonard, Tax Partner, PwC Ireland Aviation Finance Practice and author of the report; Paschal Donohoe TD, Minister for Finance, Public Expenditure and Reform and Yvonne Thompson, Leader, PwC Ireland Aviation Finance Practice.

Ireland's aviation leasing industry currently contributes US$660 million (€541 million) to the Irish economy, supporting nearly 5,000 jobs. The industry in Ireland grew by 36% in aircraft numbers in the five years to 2016 and is expected to show further significant growth to 2021. This is according to PwC's inaugural report 'Taking flight 2018: An economic & employment analysis of the aviation leasing industry in Ireland'. 

Launched ahead of this week's annual aviation finance conferences in Dublin, the report benchmarks the economic footprint of Ireland's aviation leasing industry. PwC Ireland carried out substantial research amongst Ireland's leading aviation leasing players, compiling data for the Irish industry from 2012 to 2021 on financial, fleet and staff metrics. The report also presents insights on policy areas and identifies key threats.

Paschal Donohoe T.D., Minister for Finance, Public Expenditure and Reform, commented on the launch of the report. "This inaugural PwC report benchmarks the economic impact of Ireland's aviation leasing industry and is a very valuable measure of the industry and its potential," he said. "The aviation sector in Ireland continues to grow and to be a significant contributor to the Irish economy in terms of the number of jobs created, the amount of revenue generated and of, course, the knock-on effects for the economy generally. In line with the Government’s IFS 2020 Strategy we will continue to take actions to ensure Ireland remains the leading worldwide hub for aviation leasing firms long into the future." 

Key findings of the report 

Contribution to Ireland's economy 

Based on 2016 data, the report reveals that the Irish aviation leasing industry currently contributes US$660 million (€541 million) to Ireland's economy, including direct and indirect spending. The sector also contributes some US$111 million in payroll related taxes. 

Jobs

Total Full Time Equivalent (FTE) jobs supported by the industry in 2016 were 4,970, with approximately 1,700 direct jobs. The report highlights that many of the individuals working directly in the industry are key decision makers in senior management positions. 

The report predicts significant further growth in contribution to the economy and jobs, over the next five years. 

Exceptional growth 

There has been exceptional growth (36%) in Irish-based aircraft numbers in the five years to 2016. This is expected to continue with aircraft numbers increasing by 22% in the five years to 2021. 

This is fuelled by rising wealth in Asia, with Ireland capturing much of this growth. The report highlights that Asia is eroding Europe's position as the primary location for aircraft demand from Irish lessors and should overtake it by 2018.

Brian Leonard, Tax Partner, PwC Ireland Aviation Finance Practice and author of the report, said: "The report confirms the significant economic potential of Ireland's aviation leasing industry to 2021 and beyond. It is clear that Ireland has a long standing association with the industry. This, together with a continued focus on our favourable legal and tax environment for aviation leasing, has helped position Ireland as the location of choice in the global market." 

Tax treaty network and skills seen as key strengths

According to the study, Ireland's key strength in attracting the industry is the depth and nature of our double tax treaty network. 

Our competitive tax regime, skilled labour availability and legal and regulatory framework are also key. The report notes the importance of ensuring the expansion of Ireland's tax treaty network to maintain competitive advantage. 

On talent, the report highlights that more educational programmes would safeguard Ireland's competitive position and ensure an ongoing stream of qualified industry personnel. This would allow Ireland to become a true centre of excellence in developing human capital for the global industry. To this end, the report calls for a formal strategy to ensure the current and future skills' requirements of the industry are identified and provided for. This should be a priority area of focus for the industry and the Irish Government alike. 

Competitive tax regimes in other jurisdictions a key threat 

The report reveals that the greatest threat to the Irish aviation leasing industry is competitive tax regimes in other jurisdictions. This is followed by developments from international tax reforms, the lack of a dedicated representative body for the industry and the cost of doing business in Ireland. 

Yvonne Thompson, Leader, PwC Ireland Aviation Finance Practice, concluded: "It is widely recognised that the industry in Ireland has real substance and this is a key differentiator when compared to other leasing hubs. However, there are some risks to maintaining its prime position. Ireland's high personal tax regime and lack of available housing are seen as real challenges for this people centric industry and other leasing hubs are attempting to close the gap with Ireland in terms of the breadth of their treaty networks. Ireland needs to continue to build on the work it has pioneered to date and maintain its priority position."

ENDS

About PwC
At PwC, our purpose is to build trust in society and solve important problems. We’re a network of firms in 158 countries with more than 236,000 people who are committed to delivering quality in assurance, advisory and tax services. Find out more and tell us what matters to you by visiting us at www.pwc.com.

PwC refers to the PwC network and/or one or more of its member firms, each of which is a separate legal entity. Please see www.pwc.com/structure for further details.

©2018 PwC. All rights reserved

Contact us

Brian Leonard
Partner, PwC Ireland (Republic of)
Tel: +353 1 792 6179
Email

Yvonne Thompson
Partner, PwC Ireland (Republic of)
Tel: +353 1 792 7147
Email

Johanna Dehaene
Corporate Communications, PwC Ireland (Republic of)
Tel: +353 1 792 6547
Email

Follow PwC Ireland