Dublin Aerospace considering base in regional airport
Dublin Aerospace will consider establishing additional maintenance operations at one of Ireland's regional airports, according to its founder, Conor McCarthy.
But the former Ryanair and Aer Lingus executive has said that the aircraft maintenance group is also continuing to look outside Ireland for potential expansion opportunities as it benefits from robust demand for its services.
Speaking to the Irish Independent, Mr McCarthy said that Dublin Aerospace would be unlikely to target Shannon Airport, where other aircraft maintenance firms already have operations.
Dublin Aerospace wouldn't be as constrained as airlines in terms of runway lengths. Aircraft without payloads don't need as much runway to take-off or land as fully loaded ones.
That means that airports such as Ireland West International, commonly known as Knock Airport, as well as Cork, Waterford and even Donegal could be conceivable alternatives for Dublin Aerospace.
The company, where Mr McCarthy is executive chairman, already has a substantial operation at Dublin Airport, but he said that council rates imposed on hangars in Ireland remained a barrier to expansion.
Mr McCarthy, who also helped establish AirAsia, founded Dublin Aerospace in 2009. It focuses on servicing Boeing and Airbus narrow-body aircraft and has a large customer base that includes British Airways, Aer Lingus, Easyjet and Gecas.
It overhauls, repairs and services landing gear, aircraft auxiliary power units (that power aircraft on the ground) and undertakes base maintenance.
Last November, it announced plans to hire an additional 150 staff by 2020. It has already hired 50 of those, boosting its current workforce to 450.
Dublin Aerospace also intends to double its turnover by 2023. In the financial year to the end of September 2016, it posted revenue of €45.2m and made a pre-tax profit of €3.7m. Turnover now exceeds €50m.
Mr McCarthy said the company's margins were "modest, but resilient".
The company was originally backed by investors, including AirAsia founder Tony Fernandes.
However, last year Mr McCarthy acquired Mr Fernandes' stake and a number of other stakes from founding investors. He now owns 58pc of the business. Airbus owns 21pc.
Mr McCarthy said that while newer aircraft being delivered by Boeing and Airbus required significantly less maintenance than jets a number of years ago, that was offset by rapidly expanding airline fleets around the world.
Dublin Aerospace pulled what could have ultimately been a €40m investment in the UK following the 2016 Brexit vote.
The company had concerns about the post-Brexit impact on foreign workers in the UK.
"We're continuing to look for opportunities," said Mr McCarthy. "We don't want to get ahead of ourselves. Getting a return on investment on a hangar is not easy. It's a very tight business to make a return on.
"We're looking at some other sites still. We've a very strong balance sheet and lots of cash."
The accounts to September 2016 show that Dublin Aerospace had net assets of €16.5m at the end of that period.
It had cash and cash equivalents of €5.7m and no debt.
Mr McCarthy said the company was not under any time pressure to secure an additional facility.
However, he pointed out that eventually the DAA, which operates Dublin and Cork airports, will probably require the hangars currently occupied by Dublin Aerospace and other companies at Dublin Airport for continued expansion of terminal and apron space.
Last week, Mr McCarthy was named non-executive chairman of Dublin-based carrier Stobart Air. It operates the Aer Lingus Regional service.