Ireland’s aviation leasing industry contributes $660 million to our economy and supports 4,970 full time equivalent jobs which shows that the Irish aviation leasing industry is a true economic success story.
Ireland has become the major global centre for the aviation leasing sector. In light of predictions that this growth will continue apace, PwC Ireland presents its inaugural report, 'Taking flight – 2018. An economic and employment analysis of the aviation leasing industry in Ireland'.
Based on our research with key Irish based lessors, the report benchmarks the economic footprint of the industry. It compiles data from 2012 to 2021 on financial, fleet and staff metrics, as well as providing insights on policy areas and identifying potential threats.
The economic impact of the aviation leasing industry in Ireland is considerable: it currently contributes $660 million to the Irish economy including direct, indirect and induced spending, and supports 4,970 jobs.
Ireland’s position as a central global hub for aviation leasing firms, and the overall expansion of the industry, have significantly contributed to our success as a global international financial services player.
The report highlights that the industry has real presence and tangible substance in Ireland, which is a key differentiator when compared to other leasing hubs.
Following exceptional growth in Irish based aircraft numbers in the five years to 2016 (36%), aircraft numbers are expected to increase again in the five years to 2021 by 22%. This growth is primarily 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.
Ireland offers a particularly favourable environment for the industry which has paid dividends for both the Irish economy and aviation lessors to date.
Our extensive double taxation treaty network plays a key role in creating a positive business environment for lessors. 58% of respondents cited this as the most important policy area contributing to our success in attracting the industry.
Our talent pool of skilled experts is another important factor, followed by our stable taxation environment and regulatory framework. These allow lessors to carry out their business with ease and efficiency, relative to other jurisdictions.
Inevitably, other international leasing hubs are attempting to encroach on Ireland’s position as the global leader. Hong Kong, Abu Dhabi and Singapore have all introduced competitive, aviation finance focused tax regimes. 50% of survey respondents identified this as their primary concern.
However, it remains to be seen if such offerings will be sustainable in the medium term given the continued direction of movement of the global tax environment against perceived anti-abusive measures.
The Irish approach of investing its efforts providing an attractive environment for aviation lessors by expanding and, in the case of some existing treaties, further improving its double tax treaty network is arguably more sustainable. Indeed, it is where Ireland’s competitive advantage currently lies and is a position unlikely to be eroded provided the Irish Government continues its efforts in this regard.
At PwC, we are committed to providing unparalleled, customised and fully integrated advisory, tax and assurance support to this growth industry in order to meet the needs of the market. The launch of the Aviation Finance Advisory practice demonstrates our wider confidence in this growth and strengthens our already significant commitment to the sector.
"Our research findings reinforce the view that Ireland will continue to be of great importance to the aviation finance industry over the coming years."