Business

Sunday 30 April 2017

High-flying SMBC on way to record sales year

Peter Barrett, chief executive of SMBC Aviation
Peter Barrett, chief executive of SMBC Aviation
Dearbhail McDonald

Dearbhail McDonald

SMBC Aviation Capital, the Dublin-based aircraft lessor, is on track for a record year, having sold 29 aircraft in the financial year to date.

That figure is expected to rise into the high 30s before the end of March

The surge in aircraft sales was revealed by SMBC chief executive Peter Barrett ahead of the 19th annual Airfinance Journal conference, which will be held at Dublin's Convention Centre this week. The conference has attracted 1,400 delegates from more than 65 countries.

The airlines registered to attend the conference have a total estimated current market value of $325.2bn according to the AFJ.

Barrett, whose company's revenues passed the $1bn mark last year, said the decision to hold the conference in Dublin reaffirms Ireland's reputation as the pre-eminent centre for aviation finance and leasing. "It reflects well on Dublin and Ireland's position in aviation finance that one of the biggest if not the biggest global [aviation] conferences is here in Dublin," he said.

The airlines gather in Dublin at a time of increased uncertainty for the aviation sector including risk posed by a prolonged period of low oil prices, Brexit and the US Presidential election.

Earlier this month, a report on the international aviation sector warned over complex international tax changes.

These include the implementation of the OECD's Base Erosion and Profit Shifting (BEPS) Action Plan, the Anti-Tax Avoidance Directive agreed by the EU, as well as the relaunch of the EU's Common Consolidated Corporate Tax Base (CCCTB), which could impact on aircraft lessors, airlines and other aviation financiers

Almost nine out of 10 senior executives surveyed by consultancy Deloitte and Euromoney Institutional Investor Thought Leadership predicted that international regulatory and legal changes to curb tax avoidance will have a noticeable impact on aircraft lessors. Nearly three-quarters (72pc) of more than 400 executives surveyed said that they believe BEPS will drive up compliance costs, tax bills, or both.

Around half of the world's leased aircraft are currently managed from Ireland, but BEPS is not expected to dramatically shift the geography of aviation finance, according to the survey.

Some doubted whether Ireland can maintain its dominance.

"Everybody in the world is looking to Ireland and seeing how well its strategy worked.

"You can expect others to copy it in an international race to become attractive," said one interviewee.

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