Aengus Kelly was sitting in an officious boardroom in the United States looking for a sign. Any sign. Throughout his career, he had always been able to read a room, to assess the undertow of a meeting and calculate a likely outcome. He had been involved in numerous mergers, acquisitions and corporate deals, even helping float a company on the New York Stock Exchange.

But this meeting had a different complexion and the result was far less certain. For a start, the scale of the proposed deal was staggering – Kelly’s aviation company AerCap was proposing to buy one of its largest rivals for $26 billion through a heady mix of $5 billion in straight-up equity and the assumption of $21 billion in debt. Furthermore, he was not talking to conventional shareholders, or even lenders.

No, sitting in this officious boardroom in 2013, Kelly was pitching to the US Federal Reserve. International Lease Finance Corporation (ILFC), the aviation leasing giant that Kelly wanted to acquire, was effectively under Fed control, following the bailout of its parent company AIG. If Kelly wanted to pull off his coup, he needed the imprimatur of the central bank of the United States.

Others had been down this road before; shortly after he took his seat at the boardroom table, Kelly was quickly reminded that AerCap was the 14th potential suitor to walk through the doors bristling with similar intent. All claimed to have the financial clout to do the ILFC deal.

The other thirteen, however, had struggled under the sheer enormity of the transaction – ILFC had $32 billion on the balance sheet, plus a further $20 billion of assets on order. No one had managed to convince the Fed they had the reservoir of capital and the river of debt to close the deal.

Along with a close-knit team of senior executives, Kelly had spent the previous two years preparing for this moment, crunching numbers and modelling financial projections. For those two years, secrecy was a religion, a way of life. As a listed company, AerCap could not risk the public failure of aborting such a deal. It would have undermined investor confidence and rattled the markets, particularly in a fragile global economy where sentiment was crucial.

But during those two years, Kelly had also stumbled across his trump card: Axel Weber. A former president of the Deutsche Bundesbank and a one-time member of the European Central Bank Governing Council, Weber, a German economist, was now chairman of the Swiss investment bank UBS. More importantly, he was willing to stand behind the deal and was even willing to let Kelly use his name.

“Tell the Fed I said you were good for the money,” Weber told Kelly in advance of the meeting.

And he did, explaining that this doyen of international monetary policy was backstopping the deal. “If Weber says you are good for the money, we will back you,” the Fed replied. 

The deal closed and AerCap, with its headquarters then in the Netherlands and its listing in New York emerged as the biggest aircraft leasing company in the world.

But that was not the end of the story. The new company needed a new home. And that home quickly became the global head of aviation leasing: Dublin.

*****

Six years have passed, and Aengus Kelly is sitting at a different boardroom table on a different side of the Atlantic. AerCap House is located at the junction of St Stephen’s Green and Earlsfort Terrace in Dublin 2, and its fifth-floor boardroom has striking, panoramic views of the city.

Just as AerCap’s arrival in Dublin was an endorsement of the country’s economic recovery, the company’s pristine and well-appointed headquarters was also a visible manifestation of that rehabilitation.

Once a gloomy old property, it was acquired by the businessman Denis O’Brien, renovated by Bernard McNamara, a former bankrupt on the comeback trail, and flipped for a massive profit. AerCap leased it in 2015 for a then benchmark rate of €645 per square metre on a 25-years lease.

Kelly trained as an accountant just a few hundred yards away in the 1990s, in KPMG’s industrial style office block. Yet, the company did not relocate back to Dublin and to AerCap House out of Kelly’s personal loyalty to his home city.

“If the US tax rates had been what they are today, would we have moved? Probably not.”

Following the ILFC deal, the company looked to Dublin, Singapore, Los Angeles and the Netherlands. The US tax rate made Los Angeles prohibitive, and Singapore was simply too far away from both America and Europe to be a corporate headquarters. Faced with a choice of Ireland and The Netherlands, the company opted for Dublin.

“Ireland had 12.5 per cent,” Kelly tells me, adding that the availability of staff was also a driver. “We could hire people in a niche area like ours, so Ireland had a competitive advantage. We needed to hire a lot of people and we knew we could do it in Ireland. In the end, that is why we came here.” 

However, in a warning shot to the Irish establishment, Kelly now says that if the ILFC mega deal had happened today, the company might not have relocated to Ireland at all. Instead, it would probably have remained in situ in Los Angeles, something that has since been discussed by the AerCap board.

“If the US tax rates had been what they are today, would we have moved? Probably not,” he says. “That is something the country has to be aware of.  When we moved, we were in California where taxes were 40 per cent so we were definitely going to get out of the United States.”

“At the moment I don’t think you will get a US company to come for a differential of about 7.5 per cent. They are not going to do it.”

Now, however, the US tax code has been overhauled by a Trump administration determined to woo corporate heavyweights like AerCap to either locate or retain their headquarters in the US. Whereas Kelly and his company felt they had little choice but to move in 2014, he now feels they would have had little incentive to transfer.

“It is a relevant point for policy for the country today; you probably would not have moved because it is so disruptive to move a business,” he says. “There is so much risk, particularly when you are in an M&A situation as well. You have to remember who the decision-makers are within these companies – they are not Irish people. They are Americans. Like any director, if you don’t need to create complexity in a company, you are not going to do it.

“The reward of bringing complexity unto your business has to be significant. At the moment I don’t think you will get a US company to come for a differential of about 7.5 per cent. They are not going to do it.”

As the Irish chief executive of a global company, Kelly has a unique perspective on Ireland’s place in the wider economy. It is a perspective shaped by his time living abroad and finessed by running a company with operations all over the world. And, unlike many others in his position he is not afraid to share his views.

Over the course of our lengthy interview, he speaks freely and candidly about Irish economic policy and his fears for the Irish education system.

He believes that Ireland’s personal tax rates are simply too high to lure high-powered foreign executives here, although he is a champion of the Special Assignee Relief Programme (Sarp), a scheme that offers tax breaks to relocating executives.

He is also concerned about Ireland moving down the university rankings, and worried that too many strategic decisions are being made out of political convenience and not economic necessity – “Dublin Airport’s second runway has not been built, and yet we are putting money into Waterford airport. I don’t think they have a commercial flight there. Why would you do that?” he asks.

He also speaks honestly about the changing nature of foreign direct investment, and the difference between low-value jobs that can move at a whim, and high-value relationships that can underpin the economy.

However, over the course of the interview, it is obvious that Kelly remains upbeat about Ireland, stressing time and time again that Brexit is actually a once-in-a-generation opportunity for the country. But, he says, Ireland must grasp that opportunity with every fibre of its being. 

The view from AerCap’s boardroom may stretch across St Stephen’s Green in the heart of Dublin 2. But as we speak, it is clear that the company’s chief executive is looking much further, and much deeper.

*****

“It is fine to be bigger if it is going to make you better”

It is difficult to describe the size and scale of AerCap as the nature of aviation leasing means that millions are replaced by billions. Yet, the numbers behind AerCap are truly astonishing. In the third quarter of this year alone, it raised $4.4 billion of funding and completed 271 separate transactions. It has a portfolio of 1,040 owned and managed airplanes, with a further 320 on order.

As of June 30, it had net assets of $43.1 billion and first half net income of $565 million. Its balance sheet shows equity of $9.1 billion. It is, according to its corporate literature, the world’s largest owner of commercial aircraft, the world’s largest Airbus A320neo Family lessor, the world’s largest 787 lessor and the world’s first lessor of Embraer E-Jets E2.

“What does being number one mean? You can be the biggest. But does that mean you are the best? No, definitely not.”

It buys or sells an aircraft every two days and places an aircraft on lease every working day. Its share price is robust, and it has a market capitalisation of $7.8 billion. Analysts are impressed and shareholders are happy. It all begs a question – having grown to be the biggest, just how exactly does the company intend to stay there?

“What does being number one mean?” Kelly says. “You can be the biggest. But does that mean you are the best? No, definitely not. Does that mean you are the most profitable? No. I think that the primary goal is that you have to be the best and you have got to focus on getting a return for your shareholders.

“If you do those two things, opportunity will come sooner or later. To be fair, if it is a buyers’ market, you want to be growing. If it is a seller’s market, you don’t want to be growing. You can’t say that a buyers’ market and a sellers’ market co-exist. If you have convinced yourself of that, you are only fooling yourself.

“There are different parts of the market. Over the last five years we have sold more than 500 airplanes, which is bigger than any leasing companies other than GECAS and Avolon. Do I regret any of those? No. But you find the odd strategic opportunity that comes along too.

“I think you are always trying to make sure that the company is as well run as it can be and then opportunity will present itself. The key is when opportunity comes, if you have confidence in the business and the team here in the business, then there should be no limit to your ambition.”

The aviation leasing industry has been marked in recent years by transformative acquisitions. In 2014, Avolon, the aviation leasing business established by the Irish aviation magnate Domhnal Slattery completed a €10 billion acquisition of CIT Group, a move that doubled Avolon’s scale and developed its global footprint. Chinese investors have been mopping up smaller players to try and build critical mass.

I ask Kelly if AerCap is still acquisitive? “Of course we would be for the right transaction. Every day, you are looking at allocating your shareholder’s money – it is their money. You can pay down debt. You can buy another airplane. You can buy another company. You can buy yourself. As a public company, you can do a stock buyback,” he says.

“On any given day, whichever of those is the right thing to do that is what you are going to do. But buying the wrong assets just for the sake of being big is just going to lead to a lot of trouble. Buying the wrong airplanes will lead to a lot of trouble. You have got to be very clear about it and you can’t let the ego get in the way.

“It is fine to be bigger if it is going to make you better and it is going to make you more profitable. But not otherwise. We saw it in the past in GPA. We saw it in the company we bought, ILFC, where they were buying assets the manufacturers wanted to sell them and not the assets their customers wanted just to be bigger and bigger.”

*****

“Brexit is a generational opportunity that you have if you seize it.”

Ireland stands on a precipice. The economy is both at risk of overhearing and of recession. Fuelled by lofty corporation tax receipts and effective unemployment, economic growth is outflanking our European neighbours. Yet, the potential shock of Brexit hovers like the sword of Damocles, risking tens of thousands of jobs in areas of the country that need it most. International tax reform is increasingly on the agenda also. 

Aengus Kelly, however, is positively upbeat. As soon as I mention Brexit, he starts to talk about opportunities and possibilities. Instead of focusing on the negatives, he is teeming with a cautious optimism – optimistic about the potential but cautioning that it needs policy implementation.

“The opportunity in the long run is enormous out of Brexit. No one talks about this,” he says. “It is always the negative, negative, negative. We are the only English-speaking country in the European Union. We are close to the United States. Think about the relationship that the country has with the United States – that is a country where all the biggest Fortune 500 companies are. We have that relationship.”

“If you are going to compete to bring in talent, no one is coming to a rock in the middle of the Atlantic to pay 52 per cent. That is just dead on arrival.”

According to Kelly, Ireland should market itself as the gateway between the EU post-Brexit and the US. However, he says this will require the type of reforms that are needed to bring in companies. These reforms, he says, are wide ranging, spanning from education to tax policy.

“The UK was the biggest recipient of FDI in the EU. That is going to change. It is going to be dispersed and what we need is public policy to really go after that market. That is a once-in-a-generation opportunity for the country to really go after this, instead of going on about this or that for that next six months,” Kelly says. “That is not the issue. That is a generational opportunity that you have if you seize it. Stop looking at the negatives and start looking at the positives – that should be the focus for the country.”

Ian Kehoe (IK): One of the big issues that constantly comes up is tax. We have a decent corporation tax offer, but we don’t compete on personal taxes. Do you think this should be part of our renewed offer?

Aengus Kelly (AK): That goes without saying. If you are going to compete to bring in talent, no one is coming to a rock in the middle of the Atlantic to pay 52 per cent. That is just dead on arrival.

IK: But no one seems to be listening.

AK: It is great that the country has full employment. That is fantastic. But there is full employment that can be created by momentum in the global economy. But is that employment cyclical or is it structural? If it is cyclical, once the economy goes down, a lot of jobs will be impacted. Look at coffee shops. How many people will be going around buying €3 lattes in a recession?

If you have higher-end jobs, be it in pharmaceuticals, IT, engineering, finance, if you have the higher end part of the labour pool, that is far more durable and it is not as subject to the whims of a corporation in a downturn – someone saying: ‘I have got 1,000 people in this IT company or this pharmaceutical company. They are doing lower-end jobs. They will go.’

But if you have people who are engineers or researchers, those are the ones where you build a lot more knowledge for Irish citizens to be able to build their own businesses. You create a lot more stability in the workforce. It is fantastic everyone has a job, but the question is what the quality of those jobs is. Are they jobs that will last through a recession? We saw in this country in the last go-round with construction, an extremely cyclical business. Bang.

Are parts of this country in a cyclical business? Yes, there are. Yes, full employment sounds great. But is anyone looking and saying that what we really want to have is a much higher level of employment. A, it brings in more tax. B, it is much more steady and you can plan for it in the longer term. If you have a workforce that is cyclical and subject to whims, then your tax planning is much harder. If you have a workforce that is highly skilled and earning high wages, it is generally going to be stickier. It is more valuable to the corporate entity it is working for. To that regard, 52 per cent is just a non-starter. No one is going to come to this country to pay 52 per cent.

“Where is Microsoft headquartered? Amsterdam. It is not here. We have huge numbers of employees here, which is great. But the very high earning employees are in Amsterdam.”

IK: We always say we are great at attracting foreign direct investment to Ireland, and they generate lots of real economic activity. Is the worry that we have not done enough on the indigenous side?

AK: When you talk about FDI, the key question to ask is: are we getting the right jobs? If you are just competing for the lowest-cost jobs, that is different. They will leave once another jurisdiction opens up that is lower-cost than you. Or once there is a downturn they will leave. Have you got a cyclical workforce, or do you have a structurally secure workforce that is much more resilient?

Sarp was a big positive. Now that it is successful, people are complaining about it. In the media, you will hear people saying that it costs the state this amount of money. For example, if someone earns a million euro, instead of paying 50 per cent tax, they are paying 38 per cent and it is costing the state say €120,000. The reality is that person has probably resulted in several other jobs at a minimum being brought to the country – and importantly people can learn from someone of that knowledge. That is the difference.

IK: KPMG, your old company, did a big piece of work on Sarp. They said it should be extended to indigenous companies.

AK: Of course, it should give be given to indigenous companies. Our biggest competitor post-Brexit is the Netherlands. The Sarp equivalent is more generous than ours and it has 10,000 applicants a year and has had it for many, many years.

Where is Microsoft headquartered? Amsterdam. It is not here. We have huge numbers of employees here, which is great. But the very high earning employees are in Amsterdam. They are the jobs you want. But clearly, if you are going to compete with the Netherlands post-Brexit or Singapore or anywhere like that, you have to be willing to be far more flexible. And that goes for indigenous companies. It is crazy that indigenous companies can’t benefit from this as well. If you are an indigenous IT company or indigenous pharma company, or finance, you want to be able to bring in top staff. The same with universities; they need to be able to bring in high-class people. But if you are slipping down the rankings all the time, your attractiveness to overseas research talent is fairly limited.

IK: I read an interview you gave in 2014, you said a lot of aviation leasing business was here, but the CEOs were not. Has that changed?

AK: It has changed for sure. You could say Sarp has had a big influence there in that regard. In the last five years, you have seen China Development Bank, ourselves – move more senior management here. That is the objective. If you have a senior team here, they will have all their people around them; they will hire them here, they will support Irish firms here, they will lease buildings here. They are all economic engines. If the senior people are not here, you will not consume any of those services, and the stability or the durability of the presence in Ireland will start to change.

IK: You are upbeat overall?

AK: But we have to grasp the opportunity. You have to protect yourself for the near-term volatility that is going to come, but you have to see past that and say what is the huge opportunity for this country and ask how are we going to go after that opportunity.

Aengus Kelly on… Irish education

“You want to have centres of excellence of education. If you are going to have excellent businesses long-term in an economy, you need education. Because what pays for teachers? What pays for housing? What pays for everything the citizen has in this country? Taxes. How do you create taxes? By creating wealth. There is nothing else that creates taxes. So how do we get that? What are the steps? What are the key drivers? You start with education.

Universities are going to be a recipient of government funding. They should be forced to act in the best interests of the country and not prevaricate for years and years and years competing with each other. It should not be the case with a country of such a small population base – do we really want to have seven business schools, eight different medical universities? It really does not make a lot of sense if you are going to have centres of excellence.

It is about driving education for the long term. The country has this opportunity and we have to do all we can to enhance that. Having universities continuously slip down the rankings is just not good. Whether you like it or not, the truth is that most of the world could not pinpoint Ireland on a map. When people come to look at Ireland as a place to live and to bring up their family, they look at education system . They go to those rankings – and see we have nothing in the top 100 and one in the top 200. Then they will go to look at Scotland and the Netherlands and see that they have loads. They look at the hard facts.”

” There was real value in it. You just had to have the hard work ethic to get it.”

Like so much of the aviation industry in Ireland, the story begins in Shannon – both for AerCap and for Aengus Kelly. A young trainee with KPMG, Kelly had been dispatched on audit work all over the country – meat plants in Enniscorthy, car tyre factories in Galway, mushroom producers in Monaghan. And, then, in 1995, he turned up in the Shannon offices of GPA, the aviation leasing pioneer founded by Tony Ryan.

The company had famously suffered the ignominy of an aborted IPO just three years before: hubris had taken over, and the company’s balance sheet had been exposed by unwilling financial markets. Jack Welch had stepped in with a rescue plan for GE to buy hundreds of planes and secure an option to buy GPA down the line for a nominal fee.

But as he arrived in Shannon, Kelly entered a company with a global ambition, a steely hunger and a singular philosophy.

“You are down in Shannon and you see this place that is an office out of the James Bond movie.”

“You are down in Shannon and you see this place that is an office out of the James Bond movie,” he recalls now, 19 years later. “You have very few people investing hundreds of millions of euro at the time. It was just light years away from anything else in terms of its global outlook.

“Even though it was on its knees, you could see the talent and the hunger of the people there. That was palpable. Even though I was so raw and inexperienced at the time, I was 22 or 23, but you could see it – the belief they have within themselves that they could beat anyone.”

GPA would go through many transformations, ultimately becoming what is now AerCap. And Kelly, the young accountant sent to do the audit in the mid-nineties, would go on to lead it.

IK: When you arrived, GE had rescued the business by taking hundreds of planes off GPA, and it had an option to buy the company. Patrick Blaney had taken over as CEO. The company was being transformed.

AK: We started realising over 1995/96/97/98 that there was real value in the business. The shares had been dispersed all over the world, so we went out trying to buy all the stock up. As we were buying all the stock, we knew we had to get rid of that GE option. We ended up paying them a couple of hundred million to get the option back. Then, they said as part of the deal, we had to change the name. AerCap Ireland is GPA Group PLC. It is the same entity. That is the history of it.

IK: You were very young at this point. It must have been fascinating?

AK: I was in the background, standing at the back. We bought them [GE] out with Texas Pacific Group. That was David Bonderman’s first introduction into Ireland. Then he got into Ryanair. We kept growing the business. We sold it then to DaimlerChrysler and five German banks in November 2000 for over a $1 billion. I moved to Amsterdam at that point. A lot of the Shannon operation moved to Amsterdam.

IK: But the team had seen value in it when others had not?

AK: There was real value in it. You just had to have the hard work ethic to get it. It proved to be right. We paid $200 million to GE and we sold it for a billion a couple of years later.

Then 9/11 came, Sars came, and the German banks and DaimlerChrysler said it was non-core, they did not want to hold it. So, we bought the business back with Cerberus. That closed in 2005 and then we listed on the New York Stock Exchange in 2006.

“People talk about being countercyclical. Very few are. Most people buy at the top and sell at the bottom.”

IK: One of the reasons GPA came unstuck was the failed flotation. You had no hesitation about going back to the markets?

AK: The problem with GPA was that it bought a load of airplanes that nobody wanted. And it ran out of money. If you buy airplanes your customers do not want because you believe that if you buy it they will come, well, that hubris was the ultimate failing of the business. And they were financing the business with short term money. A 25 year asset financing with 30 or 60 day commercial paper? The writing was on the wall.

We learned a lot of those lessons. They are ingrained into the culture of AerCap – we can never run out of cash and we have to make sure that we buy assets our customers actually want, not the ones Boeing and Airbus want to sell us. That is a key issue.

At any rate, in 2006, we listed it on the New York Stock Exchange. Then we went into the financial crisis. We had learned the lessons of the past. In the financial crisis, we grew faster than anyone else in the world. We had no issues, we had no defaults on our debt, no covenant breaches, nothing because we prepared for it.

IK: Many say that the industry is almost counter-cyclical – aviation companies do well in downturns.

AK: People talk about being countercyclical. Very few are. Most people buy at the top and sell at the bottom. That is what most people do in reality. They talk about being countercyclical. But very few have the capability and the nerve, the belief in themselves to do it.

As an example, in the financial crisis American Airlines filed for bankruptcy. We put $1.6 billion into American Airlines in the bankruptcy. We knew there was a plan for them. We knew it was going to work out. We felt strongly it would work and we mitigated the risk. No one else was able to do it. GE, our main competition, was almost bust. AIG was under the Fed. RBS was pretty much bust. CIT was in bankruptcy. But we weren’t and we were not owned by a big financial company. We were the ones who had the capability to do the transaction for American.

At the time, Cerberus owned GMAC. They owned Chrysler and some other investments that were under some extreme pressure. Madoff put a lot pressure on them in the financial crisis. They needed a bid for their shares and we bought them out at about $12-15 a share after the financial crisis when no one else had money. The point about it is this: you always have to make sure you are preparing for whatever may come, so you don’t just survive but you thrive.

Aengus Kelly on… the impact of climate change on aviation

“We are very focused on ESG [Environmental, social and corporate governance]. The big public companies listed on the stock exchange all have their own ESG departments. When you have an AGM coming up, in advance you will speak to the major shareholders, but you will also speak to the ESG group about what you are doing on the environment. PIMCO, in its annual report, said we were one of the companies doing the best it could in terms of transition into greener technology assets. There is a limit as to what can be done. People have to be able to travel. All we can do is to try and make it as least impactful as possible. But clearly travel is a great uniter of people as well. In terms of global travel, I don’t think it will have an impact on global demand for travel. But I do see that policy will try and push airlines and lessors, as the owner of airplanes in the world, towards being as environmentally friendly as they can be.”

“You have got to be able to act in a downturn. You want to be the hunter and not the hunted.”

We return to the ILFC mega deal. The Fed meeting was the turning point. But for two years before, AerCap and Kelly had ensured all their preparatory work had been kept under wraps. Unusually for a deal of its size, no one knew it was in motion until it was announced in late 2013.

“You don’t approach the target obviously because they are never going to be in favour of being bought. You have to make sure you have the plan. You mentioned the equity cheque of $5 billion going to $7 billion, but the real issue was the debt,” Kelly tells me.

“You had to make sure that the $26 billion of debt was going to roll or you could refinance it. That was the biggest challenge. We were confident enough on the equity side that we would be able to deal with that. But the real challenge was the debt. We looked at the capital structure and reckoned we had to come up with about $30 billion here, give or take – or have the ability to deal with $30 billion.”

Working with key advisory banks Citi and Weber’s UBS, the company worked its way through the capital structure, determining what would have to be repaid, when it would have to be repaid and how much of a bridge it would need from the banks.

“You have got to try and bring people together or let them go. Whatever you are going to do, you have to do it quickly.”

“We needed billions and billions of dollars on the bridge, we paid a $65 million fee on the signing of the transaction for the bridge. That was for the debt. We were confident on the equity. But if the debt wasn’t there, then the whole thing was never going to fly.”

I ask Kelly was it tough to integrate the two businesses, particularly when the smaller one is doing the buying. “Of course, it is,” he says. “M&A is extraordinarily difficult. The ramifications of M&A transactions go on for years.

“We had done a fair bit of M&A. We learned a lot from our experiences in the past and the mistakes that we made. You don’t prevaricate; you need a plan and go quickly because otherwise cultures can become entrenched and opinions can become entrenched. You have to try and bring people together or let them go, but whatever you are going to do, you have to do it quickly. Otherwise these things drag on too long. It becomes divisive.”

Driven by deals like the ILFC one, the aviation industry has become more mainstream. According to Kelly, the numbers of banks willing to lend to aviation leasing companies like AerCap has mushroomed from 50 to 500 in the last two decades.

“In a low-yielding environment globally, a dollar asset is an attractive asset. So, you see a lot of capital coming into the sector. It was a niche sector 20 years ago, but it has become far more mainstream now,” he says. 

Nonetheless, the wider economic trends are beginning to become more ominous. Global growth is stuttering, and the US trade dispute with China and the EU has rattled investors and spooked business.  Many economists believe the world is heading for a recession; others feel it is already in one.

How would a recession play for AerCap? “You have to be careful what you wish for. You have got to be able to act in a downturn. You want to be the hunter and not the hunted. How do you make sure you are not in a position of weakness when the downturn comes? It will be dictated by the actions that you are taking now that will determine as to where you are,” he says.

“Clearly negative interest rates around the world – does anybody know what type of behaviours that will lead to? I don’t think anyone have figured that out yet.”

But given that AerCap has 200 customers, is Kelly starting to see a global downturn? “Every year some country gets in the tank. That happens in the world. It could be Brazil, it could be India, it could be Russia or the UK or whatever. Some event happens every year that will clearly have some impact locally but for our industry it shouldn’t be material if you’ve prepared well.

“The trade war is ongoing. So far it has not had a discernible impact. But I think if the tariffs are to impact broadly across all goods, and particular services, in the global economy then that will inevitably be bad for global GDP. If services, which is a huge component, that will obviously cause a problem in the global economy, as America is a huge services provider. To date there is a lot of heat and a lot of noise, but we have yet to see a discernible impact on global trade. But if it was to go across all goods and services, it will for sure.

“That is one thing that is out there.  Clearly negative interest rates around the world – does anybody know what type of behaviours that will lead to? I don’t think anyone has figured that out yet.”

Postscript: the future

In the world according to Kelly, aircraft leasing is a microcosm for the wider economy. Ireland has a leadership position, and it needs to protect it. In its current five-year plan, China has singled out aviation finance as a growth industry. Hong Kong and Singapore are developing aviation hubs also.

“The same policies that are needed to protect this industry are needed to protect other areas of the economy as well, because everybody is going to come after you. There is no question about that. To think otherwise is to be naïve in the extreme.”

I close the interview by asking Kelly about his own plans for the future. The answer is short, but to the point: “More of the same,” he says.