Published on April 14th, 2020 | by Mark Dwyer0
CSO Publish Aircraft Leasing in Ireland 2018 Report
The Central Statistics Office have published a report on the growth of the aircraft leasing industry in Ireland from 2009 to 2018, the latest year for which figures are available. Persons employed in the industry have increased by almost 175% between 2009 and 2018, while total earnings have increased by just under 400%. Full-time equivalent employees1 have increased from 629 in 2009 to 1,620 in 2018. The average annual earnings per person engaged in the industry has gone from €113k in 2009 to €208k in 2018.
Female participation in the industry has fluctuated around 40% since 2009, but fell to its lowest level in 2018, the latest year under investigation. While the average age attained (at year end) for females has risen 37 to 38, the average age attained of males has fallen from 42 to 40 over the period. Average annual earnings per female employed in the industry has increased 36% during the period, growing from €68k to €92k. During the same period, average annual earnings per male employed in the industry, has risen 91% from around €145k to €277k.
Income has risen by almost 235%, while expenses rose by around 211%. Annualised increases for each of income, expenditure and profits have been approximately 14.4%, 13.4% and 17.4% per annum respectively. The sharpest change in profits came between 2013 and 2014, with a rise of 47%, having grown by 8% in the previous year. In absolute terms, the largest increase in income occurred in 2015, when it rose by €3.1bn to €12.7bn.
Aircraft leasing companies have earned the majority of their income in their primary activity of the operational leasing of aircraft. This activity has generated almost €87bn for the industry for the total period, rising 265% from €4.2bn in 2009 to €15.2bn in 2018. However, other sources of income raised almost €2.9bn in a single year (2017). These sources include fees & commissions and interest & dividends. In 2016, 12.2% of all income came from sources other than aircraft leasing, its lowest over the 10 year period. Over €18bn (17%) of income came from sources other than the primary activity between 2009 and 2018.
Since 2009, the most important regional sources of operational leasing income have been Europe at 38%, followed by Asia at 36%. The industry has generated just under €86.8bn in operational leasing income during the period under investigation. By country, China has been the most significant source, providing 11.2% of all operational leasing income in 10 years. The next largest country was the United States, at 9.1%, followed by Ireland at 6.7%.
At more than €6bn in 2018, the highest cost to the industry has been depreciation, an accounting cost which reflects the reduction in value of the aircraft leased by the company, over its useful life. This is followed by interest, which in 2018 was €4.5bn.
Tax paid by aircraft leasing firms has been somewhat volatile over the decade. More than €2.2bn has been paid during the period, with over 96% of this paid in Ireland. An average of €223m per year was paid, with €589m the most paid in a single year (2018). The figure in 2018 was over 26% all tax paid during the decade. Tax paid as a percentage of profits before tax was at its highest in 2009, at just over 14%.
The balance sheet grew by almost 225% between the end of 2009 and the end of 2018. This reflects an annual growth rate of 14%. The largest increase came in 2014, due to new entrants when assets increased by 72%. The industry experienced its lowest growth in 2018, with growth of just 1%. The combined total of tangible fixed assets and other assets grew by 226% over the period, in line with the overall balance sheet, growing by 65% in 2014. In comparison, debtors grew by 342% in 2014, rising from €3.8bn to €17.0bn, the largest recorded rise of any asset class.
In 2009, the industry was financed primarily through loans (41.5%) and equity (34.7%). The new entrants to the market in 2014 raised the proportion of loan-financing from 50.7% to 61.4%. It fell by almost 8% to 53.7% the following year but rebounded to 60% in 2016 and continued to grow. Equity funding has fallen to less than 22% in 2018 while loans have increased to over 64%. Bonds, notes and other funding have fallen from a combined 20% to 10% during the period. Equity funding fell to its lowest level, 21.9%, in 2018.
The full report can be read here.