Managing Agent – from GPA origins to today’s key role
In the 1970s Tony Ryan created Guinness Peat Aviation (GPA). Tony was an airline executive with an entrepreneurial spirit who, with Aer Lingus the national airline and Guinness Peat Group a financial services firm, founded GPA in Shannon. This was the aircraft leasing company which many say was the beginning of aircraft leasing worldwide. Right from the start Ireland has been a significant global hub for the sector. Today over half the world’s aircraft fleet is leased, with more than 50% of these aircraft owned in Ireland, valued in excess of $200 billion.
Numerous aviation executives and aircraft leasing companies can be traced back to GPA. Both AerCap and its leader Gus Kelly, today’s dominant force, have their origins in GPA along with many other industry leaders. Ireland’s favourable tax regime and supportive regulatory environment have made it an attractive destination for aircraft leasing companies to set up their businesses. The industry has benefited significantly from over seventy double taxation treaties with countries around the globe. As it has developed, so too has a significant qualified English-speaking workforce that extends beyond finance and legal to appraisal, maintenance and other professional services, with Ireland now also recognised for its strong presence in the Maintenance, Repair and Overhaul (MRO).
The concept of Managing Agent (originally called Administrative Agent) started in the 1990s with the advent of aircraft financings in GPA. The role of Cash Manager and Administrative Agent came to prominence in the Airplanes Group ABS, completed in 1996, which was the largest ever such deal priced at over $4.0 billion. External requirements would subsequently lead to these roles being outsourced to third-party professional services firms, giving rise to a further new industry in the provision of services to ABS transactions.
COVID-19 had a seismic effect on the ABS markets, leading to an instantaneous cessation of trading. At Fexco Aviation Services (hereafter Fexco), this presented an opportunity to further develop the role of Managing Agent to assist investors and lessors to build Warehouse structures, special purpose vehicles that would act as runways to future ABS issuances when market conditions returned. This expansion in capabilities increased our services offerings to include;
- New Aviation Business Set-Up Services
- Company Secretarial Services
- Cash Management and Waterfall Services
- Accounting and Tax Services
Of course from the outset aviation has been a notoriously cyclical industry. Our team at Fexco has experienced the Gulf War, 9/11, Global Financial Crisis, aircraft shortages and surpluses, along with numerous interest rate swings, each of which has severely affected ABS issuances. The market has been extremely quiet for the past three years, but recently has come back to life as global interest rates stabilise. The recent issuance of the $497.2 million Navigator Aviation 2024-1 ABS is strong evidence of this rebound in ABS markets. This is the second ABS from Navigator, and Fexco is proud to have worked with this programme since its inception as a warehouse structure in 2019, and delighted to be Managing Agent for this new ABS.
Aviation has been extremely resilient over the years and the future looks bright for Ireland’s aircraft leasing industry. New aircraft shortages and technical issues in existing engines means that the older fleets are thriving. Demand for air travel has bounced back since the pandemic meaning airlines are looking to expand their fleets. Aging aircraft are being replaced with more fuel-efficient models, while all stakeholders are focusing on ways to reduce the industry’s carbon footprint.
As a home grown and well-developed Managing Agent of thirty plus years, Fexco in Shannon is well-positioned to continue to lead the provision of Managing Agent services to the global aircraft leasing industry for many years to come. By coincidence Fexco is now based in Shannon Airport House, the very location from which GPA first began.
