Friday 21 July 2017

€40m Dublin Aerospace investment pulled after Brexit vote

Dublin Aerospace founder Conor McCarthy said the firm pulled a €40m investment
Dublin Aerospace founder Conor McCarthy said the firm pulled a €40m investment
Air Asia founder Tony Fernandes is selling his stake
John Mulligan

John Mulligan

Dublin Aerospace, the aircraft-maintenance group has pulled what would have ultimately been €40m investment in the UK after the Brexit vote is forging ahead with hiring 50 full-time staff at its Dublin Airport operation.

Founder, former Ryanair executive Conor McCarthy, said that the company has just offered full-time contracts to 25 people and an additional 25 full-time staff will be hired in October. That will bring the total full-time staff numbers at the company to about 290. It employs more than 400 during its peak winter period.

The Irish Independent has also learned that AirAsia founder and CEO Tony Fernandes, who was a founding shareholder in Dublin Aerospace, has sold his 20pc stake to Mr McCarthy. Mr McCarthy also helped Mr Fernandes launch AirAsia.

Mr Fernandes invested €2m in the firm in 2009 when Mr McCarthy bought most of the assets of the then SR Technics business here. Mr Fernandes's stake, and that of some other smaller shareholders, has now been acquired by Mr McCarthy, boosting his holding to 58pc.

Mr McCarthy said that the backers had secured a good return on their investment in the business, which last year made a profit of about €3m on revenues of roughly €43m - more or less unchanged on 2015.

Airbus maker EADS remains a shareholder in Dublin Aerospace, with a 21pc stake.

Mr McCarthy said Dublin Aerospace had been "very close" to pushing the button on a greenfield site in the UK last year that would have involved an initial investment of between €12m and €15m. It had lined up supports from the UK government, but June's Brexit vote prompted the company to suspend its plans.

"Brexit has caused us to take stock," he said. "One of our concerns if we were going to set up a facility in the UK would be that with our reliance on contract workers, would we be restricted in terms of their ability to come in and out of the UK to work.

"Our workforce swells in the winter and a lot of those are contract engineers and mechanics, for instance. We have marked seasonality, and we need that ability to be able to control our workforce. If you don't have flexible labour in our business, you're dead."

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He added that Dublin Aerospace may look again at establishing a UK operation, but he said the company needs clarity on what the post-Brexit environment will be like. "There's a big market in the UK for maintenance," he said. One of the company's biggest competitors, UK-based ATC Lasham, went out of business in 2015. Its clients included Ryanair, Easyjet and British Airways.

"We've a very busy facility in Dublin and we have to sweat it a lot in order for it to make sense, but that's no bad thing," said Mr McCarthy. "We've grown and we continue to grow in Dublin."

The company has more than 100 aerospace trainees working for it. He said that the Dublin operation is effectively booked up for maintenance for next winter - the earliest it has ever been almost fully pre-booked. He said customers have been competing with each other to get maintenance slots.

"We still have some capacity for sale, but we have the majority of work in the bag." Dublin Aerospace customers include airlines such as Aer Lingus, Easyjet, and British Airways, as well as lessors including SMBC and BBAM.

The company also bid on another business in Europe during the past 12 months, but Mr McCarthy said he wasn't prepared to overpay for it and did not win it.

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