“For me, the highly transactional nature of the business is really appealing”

Ross O’Connor, CFO with aircraft leasing company Avolon, talks us through the career path that took him from practice to a high-flying career in international aviation

Originally from Ballinrobe in County Mayo, Ross O’Connor studied at Trinity College Dublin and qualified as a Chartered Accountant while working with Deloitte in Ireland. After joining Avolon in 2011 as a business analyst, he rose through the ranks at the aircraft leasing company to become Chief Financial Officer. Here, O’Connor tells Accountancy Ireland about the factors that prompted his move from practice to industry and his experiences in a niche sector with international reach.

Tell us about your career starting out and how and why you became a Chartered Accountant?

I studied Management Science and Information Systems at Trinity College Dublin and then joined the CFO Services Group at Deloitte as an analyst, eventually becoming a senior consultant. 

By the time I left six years later, I’d worked across a pretty broad range of projects in the public and private sector and knew I wanted to move into industry, so I could really get to know and progress my career in a specific sector as opposed to working across a range of sectors.

I had qualified as a Chartered Accountant as well by that stage, which gave me a structured qualification I felt I could rely on in any professional environment.

Why did you decide to move into the aircraft leasing sector? 

I didn’t know a whole lot about the sector at that stage, to be honest, but the more I learned about it, the more it appealed to me. 

The sector emerged in Ireland in the 1970s and there is now a wealth of talent in the country. There is also an increasing focus on the sector through specialised training courses like the MSc in Aviation Finance at UCD Smurfit School.

A big attraction for countries dealing with aircraft leasing companies like Avolon in Ireland is that we have double tax treaties throughout the world. This gives us a big advantage over leasing companies in other countries. 

For me, the highly transactional nature of the business is really appealing. There is constant momentum and movement, and when I joined Avolon in 2011, it was still in the start-up phase. 

The company had only just launched the previous year, it was well capitalised and key decisions were being made here in Ireland. I knew I would have a really great opportunity to grow and develop my career. 

It is a small sector, so relationships are important. It is also competitive. Ultimately, you want to win business. A lot of the aircraft we lease are similar, so how successful you are comes down to how competitive you can be and how strong your relationships with your customers are.

How did your career path with Avolon progress from 2011 onwards?

I started as a business analyst on the Transaction Structuring Team, which helped me to learn about the various elements of how the business operated and, from there, I moved into a sales role in Aircraft Trading, which involved selling aircraft to global investors and leasing companies.

That work allowed me to travel in Asia and the US and gave me a chance to see the world, which was brilliant on both a professional and personal level. 

From there, I moved to the Capital Markets Team, which funds the business, raising money from banks, public markets and other investors. 

At that time, we were evolving from a bank-funded model through to funding primarily in public markets, which was an interesting journey. 

I was appointed Head of Capital Markets in 2020 and then took up my current role as Chief Financial Officer in October 2022.

Talk us through how Avolon has evolved since you joined the company?

Today, we have $30 million of assets, 578 aircraft flying around the world and customers in 65 countries. It’s a big business with an international presence.

It’s taken us a while to get here. We had 20 staff in 2011 and we were private equity backed. We listed on the New York Stock Exchange in 2014 and that was a huge event. 

We were public for about a year and then we were taken private again by Bohai Leasing, a company in China, at a 55 percent premium to our listing price. Bohai had a real ambition to grow and injected more equity into the business. 

In 2017, we acquired the aircraft leasing business of CIT Group, one of our competitors, for $10 billion. That deal doubled our size and catapulted us into a different realm in terms of global scale. 

We’ve continued to grow the business since. Last year, we had $2.3 billion revenue and $253 million net income. 

What impact did COVID-19 have on Avolon and on your role as CFO?

It was a black swan event where we suddenly had a global fleet grounded across the board. At that time, I was working on the funding side of the business with $18.5 billion of outstanding debt so a lot of our investors were calling and asking what was happening. 

We run stress tests on our business all the time and one of our key points is that our assets are usually transferable from a challenging market to somewhere else in the world where there is demand, but COVID-19 was a global phenomenon.

Thankfully, we were in the position to leverage a strong balance sheet, investment grade credit rating and high levels of liquidity, so we could protect the business through the challenges. 

When airlines started asking for deferrals on their rentals during the pandemic, we were able to support them in a lot of cases because we already had a lot of liquidity. 

We started to defer some of our order book to make sure we had enough cash in the business and quantitative easing in the US allowed us to raise capital to support this.
Our profitability was hit in 2020 and 2021 when some of our airline customers went bankrupt or restructured, so now the focus is on returning the business to our pre-COVID profitability.

It’s going well. Air traffic is back up and the reopening of China has driven increased traffic in Asia. We are seeing rising demand for our aircraft because supply chains for manufacturers like Boeing are struggling to produce aircraft quickly enough.

What next for Avolon in 2023 and beyond?

We are focused on growth and driving our financial performance following the impact of COVID. The major positive is that the market backdrop is very supportive. Airline demand for aircraft and aircraft leasing has increased dramatically with rising passenger traffic. 

Right now, we own a fleet of 578 planes, with a further 252 on order. We have 147 customers spread around the world and about 45 percent of our business is in Asia, with long-term demographic trends that are very supportive of aviation. India and the Middle East are also big growth regions for us. 

We issued a US$750 million bond offering in May. We haven’t issued a bond since August 2021 because the markets have been quite volatile due to COVID-19, the war in Ukraine and rising interest rates. 

We have lots of different funding channels and we have relied on some of our private funding channels over the last year to 18 months, but ultimately, we see the primary source of our funding as coming from public markets. Getting back into the bond market was an important milestone. 

From an internal perspective we’re really focused on further enhancements to the learning and development opportunities we offer the team. 

Recently we launched Accelerate, a bespoke leadership development programme for emerging leaders with a particular focus on developing our female leadership pipeline.

Looking back now, do you have any regrets  about the decision to train as a Chartered Accountant?

No, no regrets. The training you get as a Chartered Accountant gives you a very good grounding in terms of the quality and scope of what you can offer as a professional. 

When I was working in sales and trading here at Avolon, I was able to understand how the financials would impact and, when I went on to work in capital markets, I was able to figure out angles on the deals I was working on because of my knowledge as a Chartered Accountant.

The world opens up to you because there are so many career options available to you. The appeal for me with Avolon is that it is an Irish-based company with a global reach and outlook. 

That creates opportunity. It’s a constantly changing environment and that is what makes it so exciting and fulfilling for me.