ISTAT Jetrader - Autumn 2021 - 16

PERSPECTIVES
planning and structuring, culminating
in my appointment as chief financial
officer and board director.
I really relished these opportunities,
always being willing to move out my
comfort zone and challenging myself
and the global financial crisis) and has
come out the other side stronger each
time. That long-term relationship has
been a huge help to us as a business
as we continue to navigate the largest
challenge the sector has ever faced.
leasing groups increase their footprint
in Ireland.
The key concern for leasing groups
While many other major lessors have changed
shareholders, ORIX Aviation has had the same ownership
since inception in 1991; that has provided us with great
stability and confidence in our long-term strategy.
to develop personally and deliver
professionally. Given the significant
growth phase ORIX went through, the
learning curves were steep, but there
was huge job satisfaction in seeing the
business grow so successfully.
Jetrader: I understand you are based
in Dublin where ORIX Aviation was
started, but ORIX Corporation is
based in Japan. Does that bring with
it any challenges?
M-LK: That's correct. ORIX Aviation is
headquartered in Dublin and is 100%
owned by ORIX Corporation, which
is headquartered in Japan. It is also
a hugely diversified enterprise, with
operations worldwide, and has a 50year
history, including a long history
in aviation. While many other major
lessors have changed shareholders,
ORIX Aviation has had the same
ownership since inception in 1991; that
has provided us with great stability and
confidence in our long-term strategy.
It also means we have developed deep
relationships and grown organically as
a subsidiary of ORIX Corporation.
We are very fortunate to have such
an experienced shareholder, with an
ability to make decisions quickly. ORIX
has already lived through three major
downturns in aviation (the Gulf War, 9/11
16 * THE OF F I C I AL PUBL I CAT I ON OF ISTAT
Jetrader: How do you see Base
Erosion and Profit Shifting (BEPS)
affecting the aircraft leasing
industry? Are there long-term risks?
M-LK: Given my background, this is
an area I have a keen interest in. The
BEPS project has been ongoing for
almost a decade. In its first phase, it
had a focus on aligning taxation with
substance. This did have an impact
on the aircraft leasing sector; in
in respect of BEPS 2.0 is the proposal
for the 15% minimum corporation tax
rate. For certain leasing platforms
that are currently subject to tax below
this rate, we could see an additional
tax cost arising if the proposals are
enacted. It is important to remember,
though, that this is not just a leasing
specific challenge and will impact
all asset classes. It will, however,
be important for lessors that the
proposals take account of deferred tax,
given leasing groups typically push
out cash tax due to the availability of
tax depreciation.
While BEPS 2.0 is moving at
a reasonable pace, changes in
international tax take time and
consensus. There is a lot more road to
run before we will have a clear picture
on what is being proposed and when it
may be implemented.
Jetrader: What do you see as the
biggest challenge facing the aviation
industry coming out of the pandemic?
M-LK: The long-term fundamentals
of our business are strong and, for
While aircraft leasing has been a real success
story for Ireland, we work in a mobile asset class, and
we cannot afford to be complacent about our position
in the sector.
some cases, it has brought additional
complexity when dealing with lessees
where treaty access is important. On
balance, however, I believe lessors with
substantial operations have been able
to better manage this challenge. From
an Irish perspective, it could potentially
be viewed as an overall positive for
the country, as we have seen aircraft
the well-established lessors, the
hurdles overcome during the last
year and a half, which were on an
unprecedented scale in terms of
global impact, have really proved
the resiliency of the aircraft leasing
business model. For me, the biggest
challenge we face now is the pace
of our recovery.
ISTAT Jetrader - Autumn 2021

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