Grant Thornton’s Irish operation is managing the leases on 740 aircraft for private investors following a deal done last month.
The firm’s Dublin office has been developing an aviation services business since 2016 under partner and head of division Tim O’Connell. He confirmed on Thursday that Grant Thornton recently signed a contract to manage leases on 390 aircraft for a US private equity investment firm.
The move follows a similar deal done last year where the business took charge of leases on 350 aircraft for another US investor, bringing the total number to 740 as of last month.
Mr O’Connell said Grant Thornton could not reveal the names of the two US investment businesses on whose behalf it is working. However, he indicated they are large private equity investment firms with significant aircraft leasing divisions.
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“We’re now inundated with requests to do the same for others,” Mr O’Connell added.
Grant Thornton administers the leases to allow the investors focus on asset management, raising capital, and buying and leasing out aircraft, according to Mr O’Connell.
He explained the work was more complex than simple back office support as aircraft leases were not standard, while those doing it needed to understand the aircraft and their technology.
Grant Thornton’s work involves maintaining all the data relevant to the leases and updating it if, for example, an aircraft is altered or lease terms are changed.
The division now employs 50 people. The firm has grown it alongside its traditional tax and audit business, which has been expanding its reach into aviation at the same time.
Grant Thornton began by developing models that forecast cash flows to investors from leased aircraft. Mr O’Connell noted this was not straightforward as the agreements include both rent and reserve payments for the maintenance to which planes are regularly subject. It then expanded that by developing systems to predict the value of those maintenance reserves through the period of an individual lease.
Offering that to lessors and investors led to its first contract to manage leases on 350 aircraft in January last year.
Mr O’Connell argues the service offered by Grant Thornton helps to anchor the $100 billion aircraft leasing industry in the Republic. While Dublin is a leading centre for the industry, other cities, including Hong Kong and Singapore, have emerged as competitors.
Aircraft lessors operate by combining their own cash with debt to buy planes, mostly from manufacturers Airbus and Boeing, then leasing them to airlines, using the rent to fund their operations and pay off loans. The Republic is home to the world’s leading aircraft lessors, including Aercap, Avolon and SMBC Aviation Capital.
