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Company Closures

Dáil Éireann Debate, Thursday - 23 January 2014

Thursday, 23 January 2014

Ceisteanna (12)

Catherine Murphy


12. Deputy Catherine Murphy asked the Minister for Jobs, Enterprise and Innovation if, considering that Ireland is the number one country in the world for aircraft leasing and this contributes significantly to employment in this industry, he is concerned that the closure of the Lufthansa Technik Airmotive plant may adversely impact on this position; if there is a strategy to add value to Ireland's position in the aircraft leasing market; and if he will make a statement on the matter. [2952/14]

Amharc ar fhreagra

Freagraí scríofa (Ceist ar Jobs)

While it might be assumed that there should be strong direct linkages between leasing companies and locally located aircraft maintenance operations, the position is that Global Aircraft Leasing and domestic Irish Maintenance, Repair and Overhaul firms are not mutually interdependent. While Irish based after-market services providers undoubtedly can benefit from their proximity and relationships with the Irish based operations of International Leasing firms, the global nature of both businesses means that cost competitiveness, flexibility and capability are the key determinants in companies’ decision making processes.

The dynamics of the aircraft maintenance business worldwide are complex and fast changing, partly due to the mobility of the assets – the planes themselves - and, also due to the influence of both the aircraft manufacturers and the engine manufacturers. In many cases, under complex sale contracts, these manufacturers are increasingly determining where maintenance of their equipment is carried out.

Despite the very globalised nature of both the leasing sector, and also of the maintenance sector, IDA Ireland and Enterprise Ireland have, of course, collectively been seeking to actively encourage more collaboration between the international leasing companies and the maintenance operators who are located here in Ireland. Such synergies are promoted by the Agencies’ direct engagement with relevant companies, in an effort to develop better linkages between these two sectors of the aerospace industry. You will appreciate however, that in cases where leasing companies are making decisions relating to on-going maintenance of their fleets, such decisions are solely a matter for those leasing companies themselves and are made on commercial, business efficiency and cost grounds.

Ireland’s success in building up a world-class Aircraft leasing sector has brought very significant benefits to the economy. The sector now employs over 1,000 people and controls assets of over €80bn. We have 9 of the top 10 lessors by fleet size here in Ireland. Its development to this level has been achieved by a favourable financial climate which has been developed and we have also specialist, multi-disciplinary, personnel available with the requisite skills. In relation to work to enhance Ireland’s attractiveness for Aircraft leasing, a wide range of financial and taxation incentives have been put in place over the years. These include rules on VAT, depreciation provisions and exemptions on various measures. Also of course, in relation to Corporations Tax, the attractive 12.5% rate applies. These incentives are kept under constant review and we are very conscious of the need to be able to offer an attractive business and financial environment to attract and retain companies in such an internationally mobile sector.

IDA Ireland globally has been engaged on an on-going basis to attract companies in all parts of the aviation sector into Ireland both to increase employment and improve the scale of the industry in Ireland. These efforts will continue.

Given the circumstances I have outlined, it is not considered that the very unfortunate closure of the Lufthansa engine maintenance plant in Rathcoole will adversely impact on the position of the leasing sector here.