Grant Thornton’s Irish operation will manage 540 aircraft leases for leading aviation industry player BBAM in a deal recently agreed by the pair.
The move gives the firm’s Dublin-based aviation lease service division responsibility for the management of 1,400 leased aircraft, about one in every 12 commercial jets operating in the world today.
Grant Thornton confirmed it has agreed with BBAM, the world’s fifth biggest aircraft leasing company, to manage the leases on 540 aircraft now in use by airlines.
Under the deal’s terms, Grant Thornton will administer the leases to allow BBAM to focus on its main business, buying, leasing and selling aircraft.
Tim O’Connell, partner and Grant Thornton’s head of aviation advisory, dubbed the agreement “another major milestone” for the firm, which has been building the specialised unit since 2016. “540 aircraft is huge,” he said.
Mr O’Connell calculated it would give Grant Thornton day-to-day responsibility for managing 16 per cent of all leased commercial aircraft in the world and 8 per cent of the global fleet. About half the jets flown by airlines are leased, many of them from firms based in the Republic.
“We’re doing something that it is not being done elsewhere,” Mr O’Connell explained.
Grant Thornton manages all aspects of each individual aircraft lease for clients, which include BBAM and US private equity firms with large aircraft leasing businesses.
According to Mr O’Connell, this is more complex than back office support, as aircraft leases are not standard, while those doing the work need to understand aircraft and their technology.
Work includes keeping all data up to date, including information on maintenance, tracking changes to the contract’s terms, or alterations to the aircraft.
Aircraft leases include rent and reserve payments to cover the maintenance to which planes are regularly subject.
Part of the work involves supervising those maintenance reserves. Mr O’Connell pointed out that if an aircraft is used in a harsh environment, such as a desert, this would require the airline to increase the reserve.
If the reserve is not adequate when the lessor takes an aircraft back and sells it on, then it has to make up the difference, so managing this can be critical.
“We have engineers who ensure that everything is kept up to date, and that allows the lessors' own technical asset management team to get on with adding value,” Mr O’Connell pointed out.
Grant Thornton’s aviation advisory division employs 80 people.
Mr O’Connell argued that the firm’s service was part of a network of professional services, including specialised accountants and lawyers, that helped anchor the aircraft-leasing business here.
Along with lease management, the firm advises 11 of the top 15 lessors in the world, doing business both here and in North America.
Mr O’Connell acknowledged that it was watching US president Donald Trump’s tariff proposals carefully, as this could pose difficulties for the industry. The big manufacturers are Airbus in Europe and Boeing in the US.
He noted that Aengus Kelly, chief executive of Dublin-based AerCap, the world’s biggest aircraft lessor, recently said that a 25 per cent tariff would add $40 million to a Boeing 787’s list price.
“That would mean that Boeing would just end up supplying the US and Airbus the rest of the world, which is not feasible for Boeing,” Mr O’Connell said.
