Guinness Peat Aviation

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Guinness Peat Aviation (GPA) was a Commercial Aircraft Sales and Leasing company set up in 1975 by Aer Lingus, the Guinness Peat Group (a London based financial services company) and Tony Ryan, then an Aer Lingus executive. Based in Shannon, Ireland, it became during the 1980s the world's largest commercial aircraft lessor and expanded its shareholding to include Air Canada and companies in the Mitsubishi group. At its peak, the company was valued at $4 bn. Net income reached $265 mn in the year to 31 March 1992.

Former Taoiseach Garret FitzGerald, former British chancellor of the exchequer Nigel Lawson and the former Chairman of ICI, Sir John Harvey-Jones, were among GPA's non-executive directors. Lawson joined the board of GPA in February 1990 but he also became chairman of GPA Financial, a subsidiary company.[1]

In 1990, GPA stunned the aviation world by placing a $17 billion order for 700 new aircraft over the following decade. A new company, GPA Helicopters Ltd., was set up in June 1990 as a joint venture with CHC Helicopter to acquire, own and lease helicopters worldwide.[2]

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[edit] Downfall

However, the decision to float the company on the stock market in 1992, during an aviation industry downturn following the 1991 Gulf War, proved disastrous, as international financial institutions refused to buy shares.[3] Unable to raise the capital it needed to continue its ambitious operations, the company plunged into crisis, with some $10 billion in debts.

[edit] Restructuring

In a subsequent restructuring completed in November 1993, GPA sold some of its aircraft to a subsidiary of General Electric, GE Capital Aviation Services (GECAS), which also took over the operational management of GPA's fleet and most of GPA's technical and marketing staff. GE Capital also acquired an option to purchase 90% of GPA's ordinary shares at a low price. GPA used the cash from this transaction to repay all its unsecured debt. Chairman and Chief Executive Tony Ryan transferred to GECAS. He was replaced by Patrick Blaney as Chief Executive and by Dennis Stevenson (later Lord Stevenson of Coddenham) as Chairman.

GPA continued to own a substantial fleet and in March 1996 sold 229 aircraft for $4 bn in what was at the time the second largest securitisation transaction ever. GPA used the cash from this sale to repay all of its secured debt and the company returned to profit in the year to 31 March 1996 with net income of $65 mn.

GPA further consolidated its position in the years to 31 March 1997, 1998 and 1999, reporting net income of $108 mn, $64 mn and $47 mn. In November 1998, Texas Pacific Group acquired 62% of the company's shares and GE Capital's 1993 option was replaced by one to acquire an interest of 23%. As part of this transaction, the name of the company was changed to AerFi Group plc.

In December 1999, AerFi acquired Indigo Aviation, a Swedish aircraft lessor, and by 31 March 2000 was managing a fleet of 104 aircraft and reporting a profit of $68 mn.

In November 2000, AerFi was acquired by debis AirFinance, an affiliate of DaimlerChrysler AG, for $750 mn. AerFi's fleet and staff were then merged into those of debis and much of the management transferred to Amsterdam.

[edit] Legacy

Many of the directors and staff of GPA subsequently went on to work in other aircraft lessors, such as GECAS, CIT, ILFC, Pembroke Capital, debis (now AerCap), Irish Aircraft Management Group (now part of RBS), Babcok and Brown and Aircastle. The availability of this cadre of highly trained specialists in Ireland is one of the principal reasons (along with a favourable corporate tax environment associated with the International Financial Services Centre in Dublin) why the country has become one of the worldwide centres of the commercial aircraft financing and leasing industry.

[edit] Sponsorship

During the Ethiopian famine, GPA sponsored two airlifts of emergency supplies in October and November of 1984.[4] A number of other, mainly artistic endeavours, benefited from sponsorship by GPA that included the following, among others. In 1988 the first GPA Dublin International Piano Competition took place and was won by Philippe Cassard.[5] In 1984 Robert Armstrong won the Guinness Peat Aviation Awards for Emerging Artists[6] and in 1986 Eithne Jordan won during the show held in Dublin. One of the exhibitors was Vincent Killowry and in 1987 GPA bought most of the works at his first one man show in Limerick.[7] In 1989 John Banville received the Guinness Peat Aviation Book Award for his novel The Book of Evidence, also shortlisted for the Booker Prize for Fiction. Also in 1989 the Foynes Flying Boat Museum [1], at its inception, was sponsored as the GPA Foynes Flying Boat Museum.

A statue of Daedalus, sculpted by John Behan was presented to the people of Ennis to mark the town's 750th anniversary in 1990.[8]

[edit] Sources

  1. ^ Spinwatch: Ministers and the Money Men (retrieved 27 September 2006)
  2. ^ New York Times article Guinness Peat In Joint Venture (retrieved 2 August 2006)
  3. ^ Irish Independent article Airline crises to hasten mergers among plane lessors (retrieved 2 August 2006) (Requires registration)
  4. ^ Irish parliamentary debate Aid for Developing Countries (retrieved 4 August 2006)
  5. ^ New York Times review of Philippe Cassard New York debut at Alice Tully Hall (retrieved 2 August 2006)
  6. ^ Robert Armstrong's recent exhibitions (retrieved 2 August 2006)
  7. ^ Vincent Killowry bio (retrieved 2 August 2006
  8. ^ Ennis – Places of interest (retrieved 4 October 2007)

[edit] External links