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Irish Aviation Leasing Report 2017

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As the world’s largest CFM56 engine lessor, we have what it takes to cover your fleet.

The CFM56 and LEAP engine specialists. Go to www.ses.ie

SES is a wholly owned subsidiary of CFM International

Guaranteed.

Power to Fly Now

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capitalmarketsintelligence

The forthcoming 2018 edition of the Securitisation & Structured Finance Handbook

will be available from September 2017

www.capital-markets-intelligence.com

Visit us online for the latest financial news, featured books, content download, articles, and much more...

CHAPTER 3 I CAPITAL MARKETS INTELLIGENCE

19

Simple, transparent and

standardised: The case for a better

functioning securitisation market in

the European Union

by Ashley Kibblewhite, Bank of England

Since then a number of complementary initiatives have

further advanced the ideas and proposals presented in this

joint Discussion Paper and significant progress has been

made both at European and at international level to

develop criteria that could be used to identify simple,

transparent and standardised securitisations. Primary

amongst these have been the BCBS-IOSCO Task Force on

Securitisation Markets Consultation on “Criteria for

identifying simple, transparent and comparable

securitisations” and the “EBA Discussion Paper on simple,

standard and transparent securitisations”. The common

principles behind these initiatives are reflected in the

similarity, albeit with slight nuances, of their criteria.

Therefore throughout this article reference is made to

Simple, Transparent and Standardised (“STS”) as

encompassing the collective effort to develop criteria for

certain defined securitisation transactions going forward.

In April 2014 the Bank of England and the European Central Bank jointly

published a short paper: “The impaired EU securitisation market: causes,

roadblocks and how to deal with them”. This was followed in May 2014 by a

Discussion Paper: “The case for a better functioning securitisation market

in the European Union”, which examined the potential benefits of

securitisation and also outlined various possible impediments that may be

preventing the emergence of a robust securitisation market in the

European Union. It also presented possible policy options authorities

could consider.

Ashley Kibblewhite

Manager, Structured Finance

Supervisory Risk Specialists

Bank of England

tel: +44 (0) 20 3461 7627

email: [email protected]

19-22_SSF_20

15.qxd 26/6

/15 09:29

Page 19

THE SECURITISATION & STRUCTURED

FINANCE HANDBOOK

2018


1

Big changes planned forUS Agency MBS marketby Christopher Killian and Joseph Cox, SIFMA

The heart of the US Agency MBS market is the To-Be-Announced (TBA) market, where MBS are bought and sold ona forward basis with the identity of the pools to be delivered tothe buyer not known until two days before settlement. The TBAmarket is based on one fundamental assumption –homogeneity; that is, at a high level, one MBS pool isconsidered to be interchangeable with another pool. Thishomogeneity is provided by the standardisation that GinnieMae and each of the GSEs have created through establishmentof their loan delivery and pooling requirements, standarddocumentation, and standardised servicing criteria. Currently,there are three distinct TBA markets: one for each of GinnieMae, Fannie Mae, and Freddie Mac. In 2008 the GSEs’ regulator, the Federal Housing FinanceAgency (FHFA), took them into a governmentconservatorship and assumed the powers of the boards ofthe companies, and the US Treasury provided financialsupport to the entities. Since that time, while the GSEsremain private companies, FHFA has directed numerouschanges in the operation of the GSEs.

The most important change from the perspective of thecapital markets is the establishment of a new “CommonSecuritisation Platform” (CSP), which will replace certain

The US Agency MBS market, that is, the markets for MBS issued orguaranteed by Ginnie Mae, Fannie Mae, and Freddie Mac, is the largest andmost liquid market for securitised products in the world. These entities,which are either government corporations (Ginnie Mae) or entities thatoperate under a government charter established by the US Congress(Fannie Mae and Freddie Mac, which are Government SponsoredEnterprises, or GSEs), have fostered a more than US$7 trillion market forMBS that sees average trading volumes in the hundreds of billions ofdollars per day.

Christopher Killian, Managing Director, Head ofSecuritisation

tel: +1 212 313 1126email: [email protected]

Joseph Cox, Assistant Vice President, Securitisation tel: +1 212 313 1321


Christopher Killian Joseph Cox

SIFMA_SSF_2017.qxp:XXXX_CB_2011 31/10/2016 12:42 Page 1

CHAPTER 2 I EUROMONEY HANDBOOKS

7

Unlocking the liquidity premium in

newly originated Dutch residential

mortgages through RMBS equityby Jeroen Spoor, Dynamic Credit

Background to direct lendingopportunities for investorsEuropean banks play an essential role in providing and

channelling financing to the real economy. Strong pre-crisis

growth of bank balance sheets supported debt-financed

economic growth, which was driven by households,

corporates, sovereigns and infrastructure projects. Since

the pre-crisis period, banks have been under pressure from

regulatory requirements and investor demands to reduce

the risk from the banking sector by improving liquidity,

long-term funding and capital. In a changed regulatory

environment European banks are adapting by adjusting

their business model from loan-to-own towards lend-to-

distribute in order to fulfil the return targets of their

In this chapter we will highlight a direct investment opportunity in newly

originated Dutch mortgage loans. Dutch mortgage loans offer attractive

spreads, compared to mortgage loans in other European countries.

We believe this is the result of supply and demand imbalances in a market

that was historically dominated by banks. With house prices bottoming out

and increasing demand for new mortgages, the timing seems right for

investors to consider this market. Through specialised funds or mandates,

investments have been made into new Dutch mortgages by Dutch institutional

investors. An alternative investment option is to set up a securitisation

vehicle to invest in the equity piece of an residential mortgage-backed

securities (RMBS). Such a tailor-made investment opportunity has not yet

been available to investors and we believe it can be attractive.

Jeroen SpoorHead of Credit

Dynamic Creditemail: [email protected]

07-12_SSF_2014-15.qxd 22/7/14 16:19 Page 7

Securitisation 2018 house advert - yearbooks.indd 1 19/04/2017 09:30:14


Irish Aviation 2017 title page.indd 1 13/04/2017 11:22:56CAP8321 IALR_Pages in order AW.indd 2 24/04/2017 15:16

capitalmarketsintelligence

The forthcoming 2018 edition of the Securitisation & Structured Finance Handbook

will be available from September 2017

www.capital-markets-intelligence.com

Visit us online for the latest financial news, featured books, content download, articles, and much more...


19

Simple, transparent and

standardised: The case for a better

functioning securitisation market in

the European Union

by Ashley Kibblewhite, Bank of England

Since then a number of complementary initiatives have

further advanced the ideas and proposals presented in this

joint Discussion Paper and significant progress has been

made both at European and at international level to

develop criteria that could be used to identify simple,

transparent and standardised securitisations. Primary

amongst these have been the BCBS-IOSCO Task Force on

Securitisation Markets Consultation on “Criteria for

identifying simple, transparent and comparable

securitisations” and the “EBA Discussion Paper on simple,

standard and transparent securitisations”. The common

principles behind these initiatives are reflected in the

similarity, albeit with slight nuances, of their criteria.

Therefore throughout this article reference is made to

Simple, Transparent and Standardised (“STS”) as

encompassing the collective effort to develop criteria for

certain defined securitisation transactions going forward.

In April 2014 the Bank of England and the European Central Bank jointly

published a short paper: “The impaired EU securitisation market: causes,

roadblocks and how to deal with them”. This was followed in May 2014 by a

Discussion Paper: “The case for a better functioning securitisation market

in the European Union”, which examined the potential benefits of

securitisation and also outlined various possible impediments that may be

preventing the emergence of a robust securitisation market in the

European Union. It also presented possible policy options authorities

could consider.

Ashley Kibblewhite

Manager, Structured Finance

Supervisory Risk Specialists

Bank of England

tel: +44 (0) 20 3461 7627


19-22_SSF_20

15.qxd 26/6

/15 09:29

Page 19

THE SECURITISATION & STRUCTURED

FINANCE HANDBOOK

2018


1

Big changes planned forUS Agency MBS marketby Christopher Killian and Joseph Cox, SIFMA

The heart of the US Agency MBS market is the To-Be-Announced (TBA) market, where MBS are bought and sold ona forward basis with the identity of the pools to be delivered tothe buyer not known until two days before settlement. The TBAmarket is based on one fundamental assumption –homogeneity; that is, at a high level, one MBS pool isconsidered to be interchangeable with another pool. Thishomogeneity is provided by the standardisation that GinnieMae and each of the GSEs have created through establishmentof their loan delivery and pooling requirements, standarddocumentation, and standardised servicing criteria. Currently,there are three distinct TBA markets: one for each of GinnieMae, Fannie Mae, and Freddie Mac. In 2008 the GSEs’ regulator, the Federal Housing FinanceAgency (FHFA), took them into a governmentconservatorship and assumed the powers of the boards ofthe companies, and the US Treasury provided financialsupport to the entities. Since that time, while the GSEsremain private companies, FHFA has directed numerouschanges in the operation of the GSEs.

The most important change from the perspective of thecapital markets is the establishment of a new “CommonSecuritisation Platform” (CSP), which will replace certain

The US Agency MBS market, that is, the markets for MBS issued orguaranteed by Ginnie Mae, Fannie Mae, and Freddie Mac, is the largest andmost liquid market for securitised products in the world. These entities,which are either government corporations (Ginnie Mae) or entities thatoperate under a government charter established by the US Congress(Fannie Mae and Freddie Mac, which are Government SponsoredEnterprises, or GSEs), have fostered a more than US$7 trillion market forMBS that sees average trading volumes in the hundreds of billions ofdollars per day.

Christopher Killian, Managing Director, Head ofSecuritisation

tel: +1 212 313 1126email: [email protected]

Joseph Cox, Assistant Vice President, Securitisation tel: +1 212 313 1321


Christopher Killian Joseph Cox

SIFMA_SSF_2017.qxp:XXXX_CB_2011 31/10/2016 12:42 Page 1

CHAPTER 2 I EUROMONEY HANDBOOKS

7

Unlocking the liquidity premium in

newly originated Dutch residential

mortgages through RMBS equityby Jeroen Spoor, Dynamic Credit

Background to direct lendingopportunities for investorsEuropean banks play an essential role in providing and

channelling financing to the real economy. Strong pre-crisis

growth of bank balance sheets supported debt-financed

economic growth, which was driven by households,

corporates, sovereigns and infrastructure projects. Since

the pre-crisis period, banks have been under pressure from

regulatory requirements and investor demands to reduce

the risk from the banking sector by improving liquidity,

long-term funding and capital. In a changed regulatory

environment European banks are adapting by adjusting

their business model from loan-to-own towards lend-to-

distribute in order to fulfil the return targets of their

In this chapter we will highlight a direct investment opportunity in newly

originated Dutch mortgage loans. Dutch mortgage loans offer attractive

spreads, compared to mortgage loans in other European countries.

We believe this is the result of supply and demand imbalances in a market

that was historically dominated by banks. With house prices bottoming out

and increasing demand for new mortgages, the timing seems right for

investors to consider this market. Through specialised funds or mandates,

investments have been made into new Dutch mortgages by Dutch institutional

investors. An alternative investment option is to set up a securitisation

vehicle to invest in the equity piece of an residential mortgage-backed

securities (RMBS). Such a tailor-made investment opportunity has not yet

been available to investors and we believe it can be attractive.

Jeroen SpoorHead of Credit

Dynamic Creditemail: [email protected]

07-12_SSF_2014-15.qxd 22/7/14 16:19 Page 7

Securitisation 2018 house advert - yearbooks.indd 1 19/04/2017 09:30:14


Irish Aviation 2017 title page.indd 1 13/04/2017 11:22:56CAP8321 IALR_Pages in order AW.indd 3 24/04/2017 15:16

... for a wealth of information on the asset finance and

leasing industry.If you haven’t had a chance to visit us online

lately, you really should see what you’re missing. Go to www.world-leasing-yearbook.com to find

a wealth of information related to asset finance and leasing including country reports, the Global Leasing Report and plenty of industry news and

articles all available for you to download individually and take with you when travelling.

Visit us online...

www.world-leasing-yearbook.com

WLYFPcolour-advert.indd 1 7/22/2015 2:54:02 PMCAP8321 IALR_Pages in order AW.indd 4 24/04/2017 15:16

... for a wealth of information on the asset finance and

leasing industry.If you haven’t had a chance to visit us online

lately, you really should see what you’re missing. Go to www.world-leasing-yearbook.com to find

a wealth of information related to asset finance and leasing including country reports, the Global Leasing Report and plenty of industry news and

articles all available for you to download individually and take with you when travelling.

Visit us online...

www.world-leasing-yearbook.com

WLYFPcolour-advert.indd 1 7/22/2015 2:54:02 PM


Contents

The importance of the Irish leasing sector based in Dublin 1

Acumen Aviation

The air transport cycle and radical uncertainty 4

International Air Transport Association (IATA)

The Irish Stock Exchange is well-positioned to benefit 7 from global growth in aviation financing

Irish Stock Exchange

The new era of lease accounting 9

KPMG Ireland

Ireland: Certainty amidst the uncertainty 12

Financial Services Ireland, Ibec

Contributors Inside back cover

CAP8321 IALR_Pages in order AW.indd 5 24/04/2017 15:16

Editor: Lisa Paul

Researcher: Maria Young

Publisher: Adrian Hornbrook

Editorial Office: 35 North Hill, Colchester, Essex CO1 1QR, UK

Tel: +44 (0)1206 579591

Email: [email protected]

Website: www.world-leasing-yearbook.com

Origination by: Trait Design Limited,Tiptree, Essex, UK

Although every effort has been made to ensure the accuracy of the information contained in this book the publishers can accept no liability for inaccuracies that may appear.

All rights reserved. No part of this publication may be reproduced in any material form by any means whether graphic, electronic, mechanical or means including photocopying, or information storage and retrieval systems without the written permission of the publisher and where necessary any relevant other copyright owner. This publication – in whole or in part – may not be used to prepare or compile other directories or mailing lists, without written permission from the publisher. The use of cuttings taken from this directory in connection with the solicitation of insertions or advertisements in other publications is expressly prohibited. Measures have been adopted during the preparation of this publication which will assist the publisher to protect its copyright. Any unauthorised use of this data will result in immediate proceedings.

© Copyright rests with the publishers. ISBN 978 0 9954791 3 5


1

emerging markets. Ethiopian Airlines route to Addis Abba Hub enables connections to over 50 African destinations. Qatar Airways commences new Doha service on June 12, 2017.

Ireland has broad tax treaty networks with over 70 countries. The use of leasing services by the major Irish airlines has also promoted the growth of the sector.

The growth of major aircraft leasing services in Dublin has created an ancillary service industry. Service providers have grown in acquisition and management, execution and deal structuring, financing operations, remarketing and lease placement, transaction negotiation, sales and technical services including Irish aircraft registration. Today these ancillary service providers are collaborating to deliver end of lease (EOL) aircraft transition programmes at Dublin Airport utilising MRO and painting services.

The development of the aircraft leasing sector is a cornerstone of Ireland’s National Aviation Policy 2015 document. Government policy states that “supporting the aircraft leasing and aviation finance sectors to maintain Ireland’s global position in these spheres” recognises that aircraft leasing employs 1,000 directly and 2,000 indirectly in highly paid professional positions generating €300m in exchequer returns annually.

The Department of Transport established The National Civil Aviation Development Forum to support implementation of Ireland’s National Aviation Policy document. A working sub group was established with stakeholders from finance and leasing sector identified work streams to address barriers in the sector.

The first work stream issue raised is the

Since the creation of Guinness Peat Aviation (GPA) in Shannon in the 1970s by the late Tony Ryan, Ireland has been a centre of excellence in aviation finance and leasing. The expertise and skill resource pool developed at GPA over subsequent years has developed and grown in Dublin as new aircraft leasing companies were established by former employees from GPA.

Dublin has become one of the major global centres for the aircraft leasing sector. Fourteen of the top 15 aircraft lessors are headquartered in Ireland, prominently in Dublin. Some 50% of the world’s leased commercial aircraft are managed from Ireland, with one in every five aircraft managed from Ireland, which equates to 50% of the world’s leased fleet. Ireland now has a 63% share of the global leasing market. In 2015, approximately 4,300 leased aircraft were managed from Ireland with a total estimated value in the region of US$125bn. An Irish managed aircraft departs every two seconds across the globe.

Today Dublin is highly recognised as a centre of excellence in aircraft leasing with industry leaders based here including AerCap, Avolon, AWAS, ICBC, Orix and SMBC Aviation Capital. The key factors in the success of the aircraft leasing sector in Dublin have been the Irish government’s favourable corporate tax regime and very pro-aviation and leasing sector policies, the financial, legal and human resource expertise and skill sets.

The Irish leasing sector based in Dublin benefits hugely with global connectivity. Dublin Airport is the fifth largest European Hub for North America connecting passengers. Global connectors Emirates Airlines and Etihad Airways operate double daily services to their perspective hubs enabling global connectivity to

The Irish Aviation Authority describes Ireland as “a nation of aviators”. Dublin became a city of aviators in mid-January as the world’s two biggest aviation conferences – the 5th Annual Airline Economics Growth Frontiers and 19th Annual Global Airfinance Conference – descended on the

city, attracting over 4,500 delegates to Dublin endorsing its position as a pre-eminent hub for the global aircraft leasing industry.

by Trevor Buckley, Acumen Aviation

The importance of the Irish leasing sector based in Dublin



2

the Cape Town Alternative A insolvency arrangements and promote the benefit of the aviation finance sector.

In 2016 UCD Smurfit Business School launched a new one-year MSC in Aviation Finance in a collaborative partnership between UCD and AerCap, Avolon, GECAS, SMBC Aviation Capital and Snecma (Safran) to meet industry needs to create a pipeline of new talent with the necessary expertise and skills. The MSC focuses on developing student’s understanding of all aspects of aviation finance, with a specific focus on the practical features of global aviation markets.

The centre of gravity in global aviation continues to shift eastwards with future forecast demand and growth centred on Asia. The Chinese aviation market is one of the fastest-growing markets as over the next 20 years, Chinese airlines will need nearly 6,000 new aircraft, valued at US$780bn, accounting for more than 40% of forecast deliveries to the Asia Pacific region.

Dublin will play an increasing role fuelling the growth of Chinese aviation industry. Recognising all that Ireland has to offer in the aviation finance space, Chinese and other Asian banks have decided to establish their European headquarters in Dublin.

In 2012, ICBC Leasing, the leasing arm of ICBC, the largest bank globally, and CDB Leasing (Sinoaero), the leasing arm of China Development Bank, both established European headquarters in Dublin. In November 2013 Goshawk Aviation Limited (Goshawk) established an office in Dublin.

In 2014 IDA Ireland announced a third Chinese leasing company, Bank of Communication Financial Leasing (JY Aviation), had chosen Ireland for its leasing operations. In 2015, China Construction Bank announced the establishment of its leasing arm’s international headquarters in Dublin and Ping An International Financial Leasing established a new Dublin Office.

Chinese aircraft lessor investment in Dublin continued apace in 2015 with a significant announcement by Bohai Capital, a Chinese company listed on the Shenzhen Stock Exchange who acquired Dublin based aircraft lessor Avolon. The acquisition completed in the first quarter of 2016.

need for Ireland to be a competitive location for attracting senior decision-makers in organisations to locate here. The second work stream issue raised is the need to support and development of relevant training and education courses to ensure a strong indigenous workforce pool for the industry. The third work stream issue raised is the need for Irish-based industry representation in relevant multi-lateral bodies and institutions.

The Irish Aviation Authority (IAA) continue to prioritise their support for leasing activities by further extending the number of States to which they will delegate oversight responsibilities for Irish registered aircraft, referred to as Article 83bis agreements. These agreements afford the protections applicable under the Chicago convention to the state of registry (Ireland) while allowing the operation of the aircraft by an airline in another State.

The IAA further extended the network of States by concluding an 83bis agreement with the Islamic Republic of Iran in February 2017, opening further opportunities for Irish firms to lease to emerging markets. In announcing the new agreement, Mr Ralph James Director Safety Regulation highlighted the ongoing commitment of the IAA to facilitate competitiveness, innovation and emerging technologies among the Irish aviation industry to the benefit of Irish and global aviation.

To further enhance the attractiveness of Dublin as a global aircraft leasing hub, the Irish Stock Exchange based in Dublin launched a dedicated exchange for aviation-related debt and other financial instruments enhanced by specialised knowledge in broking, corporate and leasing firms. The exchange offers “highly efficient, low cost platform delivering better visibility, greater investor reach and improved market intelligence” for aviation related debt and other instruments.

The Irish government has invested in Aviareto through a 20% holding held by the Minister for Transport, Tourism and Sport, a joint venture between SITA SC and the Irish government, has a contract with the International Civil Aviation Authority (ICAO) to establish and operate the International Registry as required by the Cape Town Treaty based in Dublin.

To further support the aircraft leasing sector, the government plans to fully adopt


3


the global fleet expected to grow from 42% today to 50% by 2020. This growth will create huge new opportunities for the leasing sector based in Dublin.

There is significant headwind on the horizon as Hong Kong and Singapore both plan to develop into aircraft leasing and finance centres; the proposed new banking financial rules will increase costs for the aircraft leasing industry as Basel IV will increase the cost of borrowing from the banking sector to provide cash for assets for aircraft; and an unknown factor on the horizon is Brexit, in the event that the UK changes its policies to attract aircraft lessors. From January 2019 a new accounting standard, International Financial Reporting Standards (IFRS) 16 ‘Leases’, will take effect. The changes will mean that, as a general rule, all leases will now be on balance sheet.

To overcome these headwinds, collaboration and innovation will be key to strengthen Dublin’s position as a global hub for aircraft leasing by implementing all the actions outlined in Ireland’s National Aviation Policy document, to maintain and build Dublin’s attractiveness for continued growth and investment well into the future.

Author: Trevor Buckley, Digital Marketing Manager

Acumen AviationCanal House

Northumberland Road Dublin 4 Ireland

Tel: +353 1 6499051Email: [email protected]

Website: www.acumenaviation.in

Dublin’s position as a global hub for aircraft leasing has been further cemented with the announcement on April 4, 2017 that Avolon completed the acquisition of the aircraft leasing business of CIT Group Inc, becoming the world’s third largest aircraft leasing company with a combined fleet of 868 aircraft valued at over US$43bn.

The aircraft leasing sector is growing strongly in Dublin with a number of significant announcements recently. In November 2016, two industry leaders Ed Wegel and Ray Sisson announced plans to launch AVi8 Air Capital Commercial Aircraft Leasing Company with headquarters to be based in Dublin, focusing on building a portfolio with the newest and most desirable narrowbody commercial aircraft, and is in the process with several leading global investment banks and analysing potential deals.

On January 24, 2017, AJW Aviation announced that it had opened a new Dublin office to serve the leasing sector. Ian Malin, Treasurer, Director and Chief Investment Officer, AJW Group, said “the strengthening of our new office in Dublin enables us to engage more closely with our customers, and the major leasing and finance communities in this region.”

Singapore Technologies Engineering Ltd announced plans on February 13, 2017 to establish a new leasing company Keystone 4 in Ireland. Keystone Holdings is a 50-50 joint venture aircraft investment holding company between ST Aerospace Resources Pte. Ltd. and SJ Aviation Capital Pte. Ltd. Through Keystone 4, ST Aerospace will grow its aircraft leasing business by acquiring more mid-life narrowbody aircraft that are currently on lease to airlines.

Over the next 20 years 38,000 aircraft are expected to be delivered valued at US$5.6 trillion with the number of leased aircraft in


44

Figure 1 shows that we are clearly in a volatile industry, typified by cycles and shocks around a changing trend. At the start of the growth of modern commercial airline industry in the 1950s, growth rates of 15%-20% were common. The next three decades saw that trend slow as markets began to mature in the developed economies of North America and Europe. The last three decades have seen that trend stabilise as large emerging markets, with large populations and undeveloped aviation markets, began to offset the maturing Western markets.

Since liberalisation of air transport markets in the US at the end of the 1970s there have been six major cycles in the industry, the last and longest of which we are still in. Growth rate peaks have typically been followed by a sharp downturn in growth four years later; though it was one year after the dot-com bubble peak in

2000 and five years after the 2004 rebound from the SARS pandemic. But visually it certainly looks like there are regular cycles in the industry and that does seem to be the received wisdom.

So what could cause a regular cycle in the economy and the air transport industry? In the 1950s, 1960s and early 1970s it was essentially mistakes by government and business that drove the regular economic cycles of the times, that were in turn reflected in the air transport industry. There were business-inventory-driven cycles, where businesses grew too confident about demand, produced too much, leading to excessive inventories, then subsequent abrupt de-stocking and lay-offs rippled through the economy causing recession. Governments, or rather the political cycle, also played a part with incumbent parties boosting spending

by Brian Pearce, International Air Transport Association

A closely analysed topic amongst Ireland’s lessor strategy teams and a favourite panel session in air finance conferences is the longevity, or not, of the latest cycle in the industry. Ultimately it is the strength of demand for air transport from consumers that drives business in the leasing industry. We are now entering the eighth year after the last downturn in traffic, an unusually stable period of growth by the standards of recent decades. Not surprisingly then, many are seeing late-cycle signs and trying to assess if and when the next downturn will take place.

The air transport cycle and radical uncertainty

Figure 1: Cycles in air transport growth (tonne kilometres flown)

25%

20%

15%

10%

5%

0%

-5%

-10%1950 1955 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 2015

% c

hang

e ov

er p

revi

ous

year


5


and deficits in the run up to elections, with subsequent retrenchment often causing recession at the start of a new Government.

This all came to an end in the oil price crises and consumer price inflation surges of the 1970s. The focus of policy-makers turned to a battle to defeat inflation. Demand management of the economic cycle fell out of favour, as wages and prices rose in anticipation of any economic boom rendering any planned economic boom ineffective.

But the air transport industry, as well as the economy, continued to be just as volatile, with peaks and troughs and not a lot of stability in between. If not an old-fashioned economic cycle, what is the cause of this apparently regular volatility?

A brief tour through the last six industry cycles shows the diversity of boom generators and triggers for recession:• The late-1970s boom and bust in 1982 saw

a paradigm shift in economic policy, with Mrs Thatcher and Mr Reagan in the UK and US pursuing free market reforms and Chairman Volcker in the US Federal Reserve determined to do anything it took to defeat inflation. An unprecedented rise in interest rates drove the economy and air transport industry into recession.

• The late-1980s boom led to bust in 1991 after Iraq invaded Kuwait and caused oil prices to double, in turn precipitating recession and a slump in air transport.

• The boom of the mid-1990s came to a sharp end in Asia and weakened growth elsewhere in 1998, as a result of the Asian financial crisis, where a strong dollar and a loss of investor confidence in the economic policies of a number of Asian economies, coupled with their fixed exchange rate regimes and large external dollar debts, precipitated capital flight and a sharp regional recession which severely damaged air transport demand.

• The dot-com boom of the years leading up to the peak in 2000 was followed by an unusually sharp and rapid crash, as investors realised valuations of these companies were completely unrealistic. 9-11 also happened, adding to the economic recession and a major slump in air transport.

• The subsequent loosening of monetary policy and the unprecedented boom in credit led

to a strong peak of economic growth and air transport in the mid-2000s, but then ended abruptly in the Global Financial Crisis (GFC). Air cargo volumes shrank by a quarter in 2009 as cross-border trade collapsed when trade finance dried up. Air travel also slumped due to the severity of the economic recession.

• The latest peak growth in 2010 was a rebound from the extreme fall in the previous year. Economic growth since then was disappointingly weak, suppressed by the on-going debt overhang, a retreat from globalisation, poor demographics in some key economies and fiscal austerity. Air cargo has reflected this weakness but air travel has boomed, as a result of price stimulation both from LCC entry and the halving of oil prices in 2015. So far the expansion continues.None of these causes of cyclical patterns in

the global economy and in air transport can have been easily predicted or known before the event. Some of the causes are what Donald Rumsfeld has called ‘known unknowns’. Oil price fluctuations and inflation surges have happened before and in principle a probability distribution is possible to construct, allowing measurement and management of this ‘risk’.

But most are ‘unknown unknowns’. Events such as the Volcker interest rate hike, invasion of Kuwait, the Asian financial crisis, the dot-com bubble and the GFC are all largely unpredictable and only fully understood in hindsight. These shocks, together with the terrorist attacks of 2001 and the SARS pandemic of 2003, are pure uncertainties. There is no way any sort of probability distribution can be constructed for them. No risk management or modelling is possible. We simply do not know.

So most air transport industry cycle troughs are driven by ‘unknown unknowns’ or uncertainties. With that in mind what can we say about the current extended industry cycle? Well it is still worth looking at the risks, the ‘known unknowns’:• Inflation is one such risk, with an acceleration

often leading to a sharp rise of interest rates and a subsequent recession. There is a moderate rise of inflation today, largely as a result of a rebound in commodity prices. Core inflation – excluding food and energy prices – is still relatively stable. The US Federal Reserve is in the process of raising


6

apparent since the GFC, but puts the air transport industry at risk in particular since we really depend on open borders for our success. Logically this would seem a low probability risk, given the economic cost of such a policy move. It is not clear whether logic will prevail.More importantly there are the ‘unknown

unknowns’. These are the forces that ended cycles most frequently in the past. We just do not know what the next might be or when it might hit. Meanwhile, the cycle looks set to be extended further albeit at a growth rate dictated by sluggish world economic growth rather than price stimulation by airlines. In the face of a business environment where turning points are shaped by radical uncertainty the best approach is to surely build flexibility and options into your business strategy.

Author:Brian Pearce, Chief Economist

International Air Transport AssociationRoute de l’Aeroport 33

1215 Geneva 15 AirportSwitzerland

Tel: +41 227702920Email: [email protected]

Website: www.iata.org/economics

interest rates, but only slowly, and with plenty of spare capacity in many industry a sharp rise of inflation or interest rates is not widely expected.

• Oil prices are another risk. Hedging has delayed the impact of the rise so far, but the price stimulation to air transport growth of the previous few years has come to an end, and will go into reverse. Air transport growth will slow as a result. There is also the risk of something much sharper. Severe under-investment in existing oil fields in the last couple of years may lead to a supply crunch in the next few years. But we are not there yet.

• Asset price bubbles are also a risk. The unprecedented expansion of developed economy central bank balance sheets since the GFC, essentially printing billions of dollars to buy financial assets, has led to substantial distortion in financial markets. The hope was that spending and the world economy would be rejuvenated, but the most obvious effect has been to boost asset price valuations way above what could be justified by fundamentals.

• Protectionism is threatened by many recent political developments, including Brexit and the US President’s threats to impose tariffs on China. This is an extension to the retreat from globalisation that has been


It really should not be a surprise that Europe’s most successful airline, Ryanair has its headquarters in Ireland and its primary listing on the Irish Stock Exchange (ISE). Ireland has

a rich history in the aviation industry, from the first non-stop transatlantic flight which landed in a remote field in Galway back in 1919, to its position today as the world’s leading centre for

aviation finance.

by Gerard Scully, Irish Stock Exchange

The Irish Stock Exchange is well-positioned to benefit from global growth in aviation

financing

The ISE – a leading venue for debt and aviation listingThe ISE has been very much part of Ireland’s success story in aviation. As a gateway exchange to European investors and the North American market, the ISE is home not only to Ryanair’s equity listing but international airlines, airports and leading aviation financing companies are among the almost 30k bonds listed on its two markets – the Main Securities Market (MSM) and the Global Exchange Market (GEM).

Aviation related debt listingsThere are over 40 significant aviation related issuers among the 3,700 corporates, sovereigns and financial institutions from 85 jurisdictions around the globe listing bonds on the ISE’s markets. The ISE facilitates the listing of all types of securities from vanilla corporate bonds to securitisations to sukuk related debt to specialist aircraft securities. Some notable debt issuers on ISE markets are:• Ryanair – its €3bn Medium Term Note (MTN)

programme is being using to expand its fleet of aircraft.

• Emirates Airline, the largest airline in the Middle East, has issued bonds, including sukuk related debt, totalling in excess of US$1bn on the ISE. It currently has US$750m notes in issue.

• British Airways, a subsidiary of the International Airlines Group (IAG), issued a US$927m enhanced equipment trust certificate (EETC), a specialist instrument to finance the purchase of aircraft.

• Iberia, the Spanish based airline and subsidiary of IAG has a €450m MTN programme listed on the ISE.

• American Airlines, one of the largest airlines in the world, has a US$226m EETC listed on the GEM.

• Fly Leasing, the Dublin based, leading global lessor of modern, high demand and fuel-efficient commercial jet aircraft has two senior notes for US$325m and US$375m due in 2021 and 2020 listed with the ISE.

• Aercap, which operates one of the largest fleets of aircraft in the world has as range of US dollar notes in issuance on both the GEM and the MSM totalling almost US$17bn.

• Dublin Airport Authority – issued a €600m bond which helped the DAA fund it substantial capital investment programme in Terminal 2 at Dublin airport.

• Aeroporti di Roma, which manages the two main airports in Rome, issued a euro denominated MTN programme totalling €1.5bn.

Why list aviation securitiesMSM and GEM – the benefits and differencesThe ISE offers two markets, the MSM and GEM, which are equally popular with aviation issuers. Both benefit from being listed on an EU market which gives them Eurobond withholding tax exemption status and the ability to deliver enhanced distribution among European investors. Both are recognised by European securities legislation – the Markets in Financial Instruments Directive (MiFID) – the MSM as a “regulated market” and the GEM as a “multilateral trading facility” (MTF).

The differences in the markets primarily relate to regulation – the nature of the listing rules; the competent authorities who review the offering documentation, the Central Bank

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of Ireland (CBI) in the case of the MSM and the Irish Stock Exchange for the GEM; and some of the ongoing disclosure requirements.

MSM and GEM – which market?Which market to choose is a decision for the issuer and there is a wide network of international advisors, law firms and arrangers both in Ireland in the other major financial centres who are familiar with the GEM and the MSM as well as the processes and personnel in the CBI and the ISE.

The reasons to choose an ISE listingThe ISE has been listing bonds since its inception in 1793, however it is really in the last 15 years that its status and growth as a world leading venue for bond listing has taken off. Specifically the ISE offering to aviation issuers includes: • Guaranteed review times – this provides

certainty to issuers around their fundraising timetable. Both the ISE and the CBI guarantee a three-day review on first submissions and two-day review for second and subsequent submissions.

• Our people – we have the technical knowledge and expert teams who understand aviation financing. We also pride ourselves on our availability to discuss specific listing requirements and a willingness to find solutions where needed.

• Strong aviation links – we are part of the strong network of aviation finance specialists within the industry in Ireland and we also connect with professional advisors, banking, legal and corporate finance firms in the major financial centres all over the world.

• A streamlined process – the review periods, our staff and our systems combine to make this a very efficient process for all involved.

• Effective cost – our listing fees are competitive, simple and transparent.

Aviation finance – the outlookThe outlook for aviation finance continues to be positive. Global passenger traffic grew for the seventh straight year in 2016 and economic development in highly populated countries like India and China are opening up new markets for travel.

Closer to home, Ryanair, which will celebrate its 20th year on the ISE in 2017, carried 119 million passengers in 2016, an increase of 13 million on its 2015 levels and its 31st successive year of passenger growth.

Worldwide new aircraft funding requirements are expected to grow to US$126bn in 2017 and rise to US$185bn by 2021. As the world’s biggest centre for aircraft leasing, Ireland is well-positioned to benefit from this growth and continues to invest in this sector which makes a significant contribution to its economy.

The Irish Stock Exchange is also keen to continue to engage and build on its strong relationship with the aircraft financing industry to deliver capital markets solutions to aviation issuers.

Please contact our International Primary Markets team to find out more about the process and benefits of listing aviation securities on the ISE.

Author:Gerard Scully

Director of International Primary Markets The Irish Stock Exchange plc

28 Anglesea StreetDublin 2Ireland

Tel: +353 1 617 4200Fax: +353 1 677 6045

Email: [email protected]: www.ise.ie

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After nearly 10 years of discussions, the international accounting standard setters (IASB) published IFRS 16 Leases in January 2016 with the new standard requiring companies to bring

all significant leases on-balance sheet from 2019. The US standard setters (FASB) issued the new US GAAP standard on leases shortly afterwards in February 2016. Key aspects of the new

standards are converged, but there are some important differences which will result in different practice under the two frameworks, although it is predominantly the IASB standard that is

relevant to Irish lessors and airlines.

by Niall Naughton, KPMG

The new era of lease accounting

Background to IFRS 16A key long standing objective of the IASB has been to bring leases on-balance sheet for lessees. All companies that lease major assets for use in their business will see an increase in reported assets and liabilities. This will affect a wide variety of sectors, from airlines that lease aircraft to retailers that lease stores and the larger the lease portfolio, the greater the input.

Currently operating leases are off-balance sheet for lessees. Companies are currently required to disclose details of their off-balance-sheet leases and many analysts already use this information to adjust published financial statements. The key change will be the increase in transparency and comparability. For the first time, analysts will be able to see a company’s own assessment of its lease liabilities, calculated using a prescribed methodology that all companies reporting under IFRS will be required to follow.

Impact of the new IFRS standardThe impact of the new standard is not contained to the balance sheet. There are also changes in accounting over the life of the lease. In particular, companies will now recognise a front-loaded pattern of expense for most leases, even when they pay constant annual rentals.

The new standard takes effect in January 2019. Before that, companies will need to gather significant additional data about their leases, and make new estimates and calculations. The new requirements are less complex and less costly to apply than the IASB’s initial proposals.

However, there will still be a compliance cost. For some companies, a key challenge will be gathering the required data. For certain sectors, more judgemental issues will dominate, e.g. identifying which transactions contain leases in the first instance or assessing whether a contract falls into the category of a lease contract or a service contract.

ExemptionsHelpfully the IASB have permitted some exemptions to make the standard easier to apply.

The objective of this is to ease the pressure on application of the lease definition and reduce the compliance costs for IFRS preparers – notably in relation to leases of low-value items and short-term leases.

The low-value item exemption is intended to capture leases that are high in volume but low in value, e.g. leases of small IT equipment (laptops, mobile phones, basic printers) or office furniture. The exemption can be applied even if the effect is material in aggregate. IFRS 16 does not define ‘low-value’ though the IASB has indicated that it had in mind assets with a value of US$5,000 or less when new. This election can be made on a lease-by-lease basis.

The short-term lease exemption applies to leases with a term of 12 months or less. If elected, the exemption is applied to all leases within that class of underlying asset.

The exemptions permit a lessee to account for qualifying leases in the same manner as existing operating leases and to disclose only



the income statement expense relating to these leases, rather than provide detailed disclosures under IAS 17.

Impact on lessorsThe lobby for the lessor community was successful in achieving a result of very limited change in lessor accounting. The lobbying approach was very much one of “why try and fix something that’s not broken”, which the IASB ultimately listened to.

Lessor accounting remains similar to current practice, i.e. lessors continue to classify leases as finance and operating leases. Leases that transfer substantially all the risks and rewards incidental to ownership of the underlying asset are finance leases; all other leases are operating leases. The lease classification test is based on the criteria in the current lease accounting standard, IAS 17 Leases.

This accounting model is inconsistent with the accounting model to be applied by lessees – lessees follow a new single accounting model, whereas lessors retain a dual model. For example, in the case of an operating lease, the lessee will recognise a financial liability for its obligation to make fixed lease payments, but the lessor will not recognise a financial asset for its right to receive those lease payments.

Major impact on lesseesAt the simplest level, the accounting treatment of leases by lessees will change fundamentally. IFRS 16 eliminates the current dual accounting model for lessees, which distinguishes between on-balance-sheet finance leases and off-balance-sheet operating leases. Instead, there is a single, on-balance-sheet accounting model that is similar to current finance lease accounting.

Bringing operating leases on-balance sheet also changes the profit-and-loss account of lessees. Currently, operating lease expenses are charged to the P&L on a straight-line basis over the life of a lease.

From 2019, leases will be accounted for as if a company had borrowed funds to purchase an interest in the leased asset. This typically results in higher interest expense in the early years than in the later years, similar to any amortising debt. In turn, this means that total lease expense in

the profit and loss account will be higher in the early years of a lease – even if a lease has fixed regular cash rental payments.

For airlines that lease aircraft this will have a significant impact on their balance sheets with the limited recognition exemptions likely to be of limited benefit given the value and duration of typical aircraft leases. An additional consideration will be the foreign exchange aspect which may introduce increased profit and loss volatility where the lease liability is in a currency (normally US dollars) other than the functional currency of the airline.

Wider business impactsKey financial metrics will be affected by the recognition of new assets and liabilities, and differences in the timing and classification of lease income/expense. This could impact debt covenants, tax balances and a company’s ability to pay dividends. The additional assets and liabilities recognised and the change in presentation will affect key performance ratios, e.g. asset ratios and debt/equity ratios, and consequently could impair the ability to satisfy any debt covenants that are not applied on a ‘frozen GAAP’ basis.

IFRS versus US GAAPThe IFRS and FASB progressed a joint project in this area for a number of years before ultimately deciding to issue two separate standards. There were a number of areas where agreement could not be reached with the most important relating to:• the lessee accounting model;• detailed measurement and transition

requirements; and• the exemption for low value items.

The biggest difference relates to the lessee dual accounting model. While IFRS 16 contains a single lessee accounting model, US GAAP will feature a dual model for lessee accounting, i.e. finance vs. operating leases. Under US GAAP, finance leases will be accounted for in the same way as under the IASB’s model. Operating leases will also be presented on the balance sheet with a right-of-use asset and a lease liability.

However, for operating leases, lease expense

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will typically be recognised on a straight-line basis, i.e. not front-loaded, and presented as a single amount within operating expenses. In order to achieve this profile of lease expense, the lessee will measure the right-of-use asset as a balancing figure, i.e. a plug. In addition, lease payments for operating leases will be presented within operating activities in the statement of cash flows.

ConclusionFirst time application of the new standard is likely to be challenging for many reporting entities and hence a lead in time of almost three years. Now that the debate of almost 10 years is over and the new rules finalised, companies will need to move quickly to commence implementation which in many cases will need to be executed in parallel with other significant financial reporting change projects related to IFRS 9 on financial instruments and IFRS 15 revenue recognition. The transition options within the standard are complex and early engagement to determine the most appropriate option for an entity’s circumstances is critical.

For the aviation industry, it is likely to be broadly business as usual for lessors with some considerations around sale-and-leaseback transactions and intermediate leases to be factored into transition plans. For airlines with large lease portfolios, the transition will be significant with the balance sheet changing fundamentally, a different profile of lease expense in the profit-and-loss account as well as potential foreign exchange volatility from dollar-denominated leases.

Author:Niall Naughton, Audit Partner

KPMG1 Harbourmaster Place

IFSCDublin 1Ireland

Tel: +353 1 410 1000Email: [email protected]: www.kpmg.ie/aviation

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by Marc Coleman, Financial Services Ireland, Ibec

We get asked a lot of questions about the economic outlook for Ireland. And for good reason as we are dealing with a Brexit vote that, uniquely, impacts on our land borders despite Ireland being an island. Ireland is also faced with the same challenge as every other EU country in relation to uncertainty over the future of EU-UK relations, over the policy direction of the new US administration and more generally in relation to the future cohesiveness of the global trading and regulatory environment. We, in this case, is Financial Services Ireland (FSI) – a vital part of Ibec the representative body for businesses and employers in Ireland.

Our expertise aside, the reason we have been asked these questions with such regularity recently is that there is so much uncertainty. The best way to deal with uncertainty is to go back and look at what we do know, to revisit the facts. 2016 was a strong year for the Irish economy with employment growing by 2.9%. Brexit will bite but 2017 is expected to see growth of about 2.8% in GDP terms. This is almost twice the European average. If you are facing into economic uncertainty, then you would want to start with the sort of strength we already have.

In respect of aircraft leasing, the current state of play and our history show similar solidity. The Irish aircraft leasing industry has, since its inception in the 1970s, survived three recessions to become a world leader.

Underlying this is the success of Ireland in the broader field of aviation, a success whose history mirrors that of the state: the world’s first transatlantic flight landed in Ireland as the War of Independence was beginning. Earlier still Belfast woman Lilian Bland became one of the first women in the world to build and fly her own plane in 1910.

As Ireland developed in the post-independence era the necessity to expand air links to serve Ireland’s economy made companies Aer Lingus and Guinness Peat Aviation foundation stones for generations of entrepreneurial talent to follow.

The invention in Ireland of the ‘duty free’ concept in Shannon Airport in the 1940s and the modern aircraft leasing business in the 1970s are both testament to Ireland’s capacity to innovate. More recently we have seen

Ryanair take an existing model and fine-tune and upscale it to create one of the most consistently profitable and largest airlines in the world.

But it is in the field of aviation leasing and finance where Ireland has really stolen a march. Right now, 14 of the world’s top 15 lessors operate from Ireland. A fifth of the global aircraft fleet is under management from Ireland, which translates into more than half of all leased aircraft. It is estimated that an Irish-owned aircraft takes off every two seconds.

Again, sound fundamentals and a great track record.

That brings us to the next problem with uncertainty. Can we, should we, expect to maintain our competitive position? Or, to put it another way – what is the plan to achieve that?

FSI and our parent organisation, Ibec, have been working with the Irish Government to make sure the right policy initiatives are in place. From the introduction of the Special Assignee Relief Programme, the drive to improve the competitiveness of our income tax offering and ongoing work to improve our business operating environment, Ibec has been a key foundation of the aviation leasing sector’s success. We are now developing a more industry-specific plan to promote the sector’s contribution to the economy publicly and to work to improve and update our double taxation treaties, Ireland’s status in relation to the Cape Town Convention and to address issues such as securitisation and access to skills.

With the ever-present threat of competition for this global business, we will not be

Ireland: Certainty amidst the uncertainty


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Tax Treaty networks, Capital requirements regulations and section 110 of the Taxes Consolidation Act. On the generic side, we find issues like the rate of marginal tax, SARP and the crucial issue of skills.

With Ibec FSI is making progress in representing industry opinion on all of these issues. One example of this is the progress we are making in the area of skills. In 2015 FSI put both skills and education – especially making financial services a more attractive career option for second level students – at the heart of IFS 2020. Simultaneously FSI also published, together with Accenture, an extensive report on skills needed in key subsectors of financial services including aviation leasing and finance.

Two years later, through industry-sponsored skills initiatives, there are now multiple post-graduate courses on offer in third level institutions, including the Masters in Aviation Finance at UCD Michael Smurfit Graduate School of Business. FSI’s planned Apprenticeship scheme will also be a benefit to the industry.

Through our Aviation Leasing Task Force we are working to replicate that success across all areas of policy that the industry identifies to us as a priority.

FSI’s broad remit across financial services gives it a unique relationship with the leasing sector and also with the professional advisory companies on which it depends. So we have worked closely to ensure alignment of priorities. The contribution of the leasing sector to the Irish economy is also evident here, with new and expanding professional services sector in Ireland.

I mentioned at the outset that we are unusual in having a land border on an island – that is a by-product of our history. Two of our other historical by-products have proven to be extremely useful, namely the fact that the language of business in Ireland is English and that we are a common law jurisdiction. Being able to do business in the language of international business and to resolve disputes in a manner firms can understand and can relate to will matter a lot in the future.

We know the future is uncertain, but that is always the case. The important part is that we do not allow what may be perceived as increased uncertainty to deter our ambitions. The world

complacent about pushing to keep Ireland as attractive as it needs to be into the future.

We have also been instrumental in creating and maintaining a public-private partnership to grow employment in the sector. Called the International Financial Services (IFS) 2020 Strategy, the focus of that partnership set an objective back in 2015 to add 10,000 net new jobs to Ireland’s International Financial Services sector by 2020. Not only is this on or ahead of schedule but with Brexit presenting new opportunities, that target may be lower than what can be achieved if the right policies are put in place. To that end a specific Action Plan for 2017 is now in place to adapt the IFS 2020 strategy to the new challenges and opportunities posed by Brexit.

In the drive to bring new international financial services jobs into Ireland, the aviation leasing industry deserves to be seen as a flagship for what we can achieve globally, and plan to achieve for other IFS sectors.

For that reason, FSI successfully advocated for the inclusion of an aviation leasing representative on the Industry Advisory Committee that supports the aforementioned IFS 2020 Strategy. The relationship between aviation leasing and IFS 2020 is mutually beneficial.

Established in February 2016, the National Civil Aviation Development Forum is the second major element of the Government’s commitment to the aviation sector. Whatever the challenges, the forum demonstrates a principled commitment and involves many excellent and dedicated experts. Its goals are ambitious – in its own words “it will strive to make Ireland the most competitive country for aviation globally”. It will also, it states, create a space for collaborative and innovative thinking for the Irish aviation sector, bringing together stakeholders and decision-makers across all sectors to develop our position as a global aviation leader and supports the broader industry.

FSI and Ibec have built on those commitments and are tackling the key issues to keep Ireland competitive. This work is done through the FSI Aviation Leasing Task Force, key priorities of which might be divided into industry specific and generic categories. On the specific side, we find, among others, issues such as the updating of Ireland’s Double


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sectoral financial services body, representing domestic and international companies from banks, aviation lessors, wealth managers, funds, fintech, insurance, to corporate treasurers. For more information, visit www.fsi.ie.

Author:Marc Coleman, Director

Financial Services Ireland, Ibec84/86 Lower Baggot Street

Dublin 2, D02H720Ireland

Tel: +353 1 605 1565Email: [email protected]

Website: www.ibec.ie, www.fsi.ie

is hugely interconnected and every country is facing variable degrees of uncertainty right now. Ireland is not just accustomed to change, but we have shown recently that we can come through a very challenging period successfully and stronger than before. We have a history that shows we know how to innovate and optimise through adversity and an ability to plan for coming changes.

About the author:Marc Coleman is Director of Financial Services Ireland, a trade association with Ibec, the representative lobby for businesses and employers in Ireland. FSI is the only cross-


Acumen AviationCanal HouseNorthumberland RoadDublin 4IrelandTel: +353 1 649 9051Email: [email protected]: www.acumenaviation.inVP Business Development: Martin Corcoran

Financial Services Ireland, Ibec84 Lower Baggot StreetDublin 2, D02 H720IrelandTel: +353 1 605 1500Email: [email protected]: www.fsi.ie; www.ibec.ieDirector FSI, Ibec: Marc Coleman

International Air Transport Association (IATA)route de l’aeroport 33PO Box 4161215 Geneva 15SwitzerlandTel: +41 22 770 2920Email: [email protected]: www.iata.orgChief Economist: Brian Pearce

Irish Stock Exchange28 Anglesea StreetDublin 2IrelandTel: +353 1 617 4200Fax: +353 1 677 6045Email: [email protected]: www.ise.ieDirector of International Primary Markets: Gerard Scully

KPMG1 Harbourmaster PlaceIFSCDublin 1IrelandTel: +353 1 410 1000Email: [email protected]: www.kpmg.ie/aviationAudit Partner: Niall Naughton

Contributors



SUSTAIN AIRLINE FINANCIAL HEALTH

Innovate . Accelerate . Deliver The 4th IATA World Financial Symposium (WFS) will focus on speed, e�cient delivery, and industry innovation to support sustained airline �nancial health. It will be held on September 27-28 at the Convention Center Dublin, Ireland.

WFS will bring more than 700 �nancial executives and specialists together to share insights and to discuss industry challenges and best practices for aviation �nancial management.

Join us for invaluable sessions covering a wide range of hot topics:

Aircraft Financing / Blocked Funds / Airline Cost Management / E-Fueling / IFRS 16 / Payment / Risk Management / Complex Taxes / FinTech / Total Distribution Costs / Digital Finance / Financial Risk Management New feature – Innovation Jam Session:

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Join us in Dublin! For more info: http://www.iata.org/events/wfs

27 – 28 September 2017Dublin - Ireland


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