Acumen Aviation looks to AI for further growth
Since moving headquarters from India to Ireland, Acumen has grown tenfold
Irish aviation-leasing services company Acumen Aviation has seen business grow tenfold since it moved its business from India to Dublin in 2013.
The company is predicting even faster growth in the years to come as it builds on its evolving fleet-management business with the launch of a €1m programme to develop specialised machine-learning and artificial-intelligence-based tools to apply to the aviation market.
"Things that used to take us three days now take us half-a-day," said chief executive Alok Anand, who started the original business in Bangalore, India, before moving its headquarters to Ireland.
"This year, we are focusing on what we believe is our moonshot programme to automate the whole asset-management side of the business, using the latest technologies. Our customers love it, they get real efficiencies and real value out of it."
Those customers are some of the biggest aviation-leasing giants in the world, many of them based in Ireland, who own an increasing proportion of the planes used by airlines around the world.
"The overall growth in the market is obviously part of the story, but from our point of view, it is not just that," said Anand. "We have global reach and our bandwidth of capabilities is wide. We cover the whole spectrum in terms of the services we provide to the aircraft-leasing companies.
"One thing that is surprising about the leasing industry is that although it is at the leading edge of aviation technology, the industry in other ways is not there yet. For example, spreadsheets are still the norm in valuations, something that would not be the case in other industries.
"The technique of valuation must be much more specific. It is a little bit like a black art. We want to take away that unpredictability and make it more reliable. It should not be a gut feeling, it should be justified by data."
Acumen provides basic services, such as aircraft inspections for asset-management purposes, so that investors can make an assessment of a plane's value, as well as more advanced analytical services, such as cashflow monitoring.
"An aircraft has a life cycle," said Acumen's chief commercial officer, Eamonn Cronin. "On day one, it is bought but first needs to be valued to see if the price stacks up. On day two, it is put out on lease with an airline. That lease needs to be managed - everything from collecting the rent to inspecting the aircraft, reviewing its records and condition.
"And then when the lease ends, it is moved from one airline to the next airline. We manage all of that for our customers and we are increasingly using technology to do that."
Anand said he started Acumen because he saw that "the leasing industry requires support from the ground up to the highest level".
"I started at the very ground level," said Anand, a trained aircraft engineer who began investigating the idea of offering basic support services to the sector in India in 2008.
But he quickly realised that the aircraft-leasing industry was predominantly Irish-based.
"So I came here, I networked, I met people, asked questions and I decided to take my chances and I took all my life savings and created the Acumen Aviation business here in 2013."
According to Anand, in the Irish context, Acumen is still a startup but has expanded rapidly. Initially, it had three staff in Ireland but that has grown to a full-time staff of 17, as well as a large pool of Irish contractors, in just over four years.
In that time, Acumen has evolved into an asset manager that provides lease-management services for nearly all of the blue-chip investors in the sector, apart from Gecas and Aercap.
The company provides support for the leasing companies, ranging from aircraft inspections to technical assistance, software and data-management, as well as - more recently - trading, remarketing and commercial services.
"We were bang in the middle of the two big mergers that have happened in the industry in recent times, supporting the different lessors through the process," said Anand.
Currently, the business has about 37 aircraft under full lease management from the Dublin office on behalf of clients in a number of countries. It hopes to grow that to 100 in the next two years. In total, the business works on up to 2,000 aircraft each year, up from about 200 in 2013.
The Irish business now also operates subsidiaries in the US and China, as well as the original Indian-based business, but does not reveal its turnover. Worldwide, Acumen Aviation now has 70 staff and operations in 200 countries.
"If we grow from 37 aircraft to over 100, it is conceivable that we would double our staff numbers here in Ireland," said Cronin.
According to Anand, the company's employee base in Ireland is "mainly at the high-end section of the business, concentrating on management services. The industry is very well established here, so there is a lot of talent."
Although Chinese money is now dominating the sector, the two biggest lessors, Aercap and Gecas, are not Chinese-owned, he said. But he does not believe that the Chinese entrance into the market is a threat to Ireland's position as the global base for the sector because of the huge amount of support services that have been set up here over a number of decades.
"We have to be here in Dublin. There is no other choice. This is where the growth is. Hong Kong has started making inroads and I believe it will catch up on Singapore. But for it to catch up on Dublin will take two decades at least."
Lessors who set up in Hong Kong will still need an Irish base, he said.
Anand himself still lives in India but spends a lot of time travelling to and from Ireland
"I have more Irish friends than Indian friends now," he said. "The Irish industry has been very supportive to me. They reward you on merit. In the part of the world I come from, that is not usual. Before I started the business here, I used to come to the aviation conferences in Dublin and the amount of encouragement I would get from people was something I loved."
Sunday Indo Business