Business Irish

Wednesday 28 September 2016

Irish plane-leasing executives share $12.3m pay bonanza

Gordon Deegan

Published 15/08/2015 | 02:30

Peter Barrett CEO of SMBC Aviation Capital. Photo: Damien Eagers
Peter Barrett CEO of SMBC Aviation Capital. Photo: Damien Eagers

Key management personnel at Dublin aircraft leasing firm SMBC Aviation Capital shared a pay bonanza of $12.35m (€11.1m) this year.

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New figures lodged by the IFSC-based firm show that directors at the firm along with members of the executive committee and company secretary last year received $11.9m along with employment benefits of $420,000.

The firm is the world's third largest aircraft lessor and Ireland is the world capital for firms engaged in aircraft leasing that was spawned from the creation of Tony Ryan's Guinness Peat Aviation (GPA) in Shannon in the 1980s.

The accounts for the Japanese-owned SMBC Aviation Capital for the 12 months to the end of March 2015 show that pre-tax profits decreased by 8.5pc, going from $212m to $194m.

The drop in profits came in spite of revenues increasing by 14pc, from $771.9m to $879.85m.

The firm's top executive directors are all Irish and resident in Dublin.

They are listed as chief executive Peter Barrett; chief legal officer Catherine Ennis; chief financial officer Barry Flannery and chief operating officer David Swan.

SMBC Capital Aviation - formerly RBS Capital Aviation - was purchased in 2012 by Japan's second largest bank, Sumitomo Mitsui, for over $7.3bn (€5.8bn) from RBS.

SMBC Aviation Capital today owns and manages 417 aircraft valued at over $15bn on lease in over 40 countries around the world.

It has 95 airline customers and over 42 investors and is headquartered in Dublin and has offices in Tokyo, Shanghai, Beijing, Hong Kong, Singapore, New York, Amsterdam, Toulouse and Seattle.

In addition, the firm has made commitments to purchase a further 214 aircraft worth over $23bn from Airbus and Boeing in the coming years. The firm's operating profits last year increased by 7.5pc to $440.5m.

The reduced pre-tax profits arose from higher interest payments of $240m, impairment charges doubling from $26.17m to $52.23m and break losses going up by 100pc to $6m. The firm's corporate tax bill totalled €29.76m.

Numbers employed at the firm rose by 16pc from 113 to 131 and staff at the firm are richly rewarded for their work.

The 113 staff last year shared a pay bonanza of $49.19m, or €375,000 each on average.

The figures show that 48 employees were in operations with 27 in commercial and strategy functions with the remaining in financial compliance and other support functions.

The directors state that they are satisfied with the group's and company's performance in the financial year.

A breakdown of the firm's revenues show that it recorded $795m in rental revenues with an additional $55m in maintenance fees less lease incentive amortisation of €27.78m.

The operating profit last year took account of non-cash depreciation costs of $285m.

At the end of last year, SMBC Capital had total assets of $9.7bn.

RBS Aviation Capital was spawned from International Aviation Management, a company established by Domhnal Slattery.

Mr Slattery sold International Aviation Management to RBS in 2001 for an estimated £30m.

The Clare man went on to establish Avolon, which is now in exclusive talks with China's Bohai Leasing that values the firm at $2.64bn.

Irish Independent

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