ISTAT News | 01 June 2019

Jetrader: Q&A With Gerry Butler

Jetrader: How did your career in aviation start? What was it like in the beginning?

Gerry Butler: My career began through a lot of luck by meeting Barry Flannery, now CFO of SMBC Aviation Capital, at a golf event on 28 December 2001. Barry and I got chatting about what he did, as we had some mutual friends from our school days, and I found it fascinating. Financing aircraft. Wow. After a prolonged interview process, including being flown to Shannon to meet Dómhnal Slattery (then CEO), I got the nod to join what was Lombard Aviation Capital (soon to be renamed as RBS Aviation Capital) and started on my birthday, 15 April! Actually, that was a Monday, and I remember being brought for drinks by Donal Boylan and Dennis Hogan that night at Slattery’s.

The office was located in a converted house on Northumberland Road. I was a pricing and credit analyst in my formative years, although I don’t remember being very good at the pricing side of things! The world was an unusual place, as it was still quite raw from the tragic events of September 11, and this was even more so the case for the aviation finance industry. The one great thing I remember about those early years was the people.

I didn’t realize it at the time, but effectively we were part of the next industry powerhouse that would form the bedrock for other leasing ventures in the future. You were engaging with people who would become great industry leaders and pioneers such as Dómhnal Slattery, Peter Barrett, John Slattery, Ruth Kelly, Donal Boylan, David Swan and Barry Flannery (to name just a few) on a daily basis. It was thoroughly enjoyable and a fantastic learning environment.

Jetrader: What is it about aviation that’s held your attention for so long?

GB: It’s just a fantastic industry — one that is bound by the strength of relationships. It affords you the ability to see wonderful places, meet interesting people and explore varying cultures all in the name of getting a deal done. It is an industry that is more like a community, as while it is high on quantum of capital, it tends to be low in terms of quantum of people. So you get to know most of the people and usually get to meet them at some ISTAT event in some far-flung destination over a cold beer.

Jetrader: What did the industry look like when you started versus today?

GB: As I said earlier, it was April 2002. The world was still reeling both emotionally and economically from the tragic events of September 11. While new capital had entered the aircraft leasing space, 2002 saw a huge gap in capital availability for financing and leasing. Dómhnal and Peter saw that gap and executed a plan to take advantage of it with RBS. It was nice to be a small part of seeing that large wheel go around. Today, the industry is more mature — products are more commoditized and while cost of capital is still a key factor, the strength of relationships and ability to execute is as important.

Jetrader: How long were you at Apollo Aviation, and what was memorable about your time there?

GB: I was at Apollo Aviation (now Carlyle) for almost seven years. It was a time of global distress with Lehman collapsing and the world wondering if it would keep turning. It was stressful! However, both Bill Hoffman and Robert Korn had huge drive, and out of this came the hunger to create the business it is today. Being involved in developing the business into a true institutional fund manager was a great experience, but building out the Dublin office with brilliantly talented university graduates was something I prided myself on. This was primarily because we couldn’t afford industry veterans, so we focused on getting in grads and growing organically. We had a lot of fun, too. I have some hazy memories of great nights out and pizza parties on rooftops. It’s great to see that while some of those grads have moved on to pastures new, the majority continue to blossom and forge a pathway for their careers in this industry.

Jetrader: How did you get started at Merx?

GB: Gary Rothschild (CEO), David Van Dorn (CIO) and I had been friends for quite some time. While at Apollo Aviation, we managed funds for a unit of Citi, which both Gary and DVD headed up. After taking some time out after Apollo Aviation, I was approached by Gary and asked if I would like to join their setup. The ability to get access to a funding source that is one of the world’s largest asset managers with the New York-based PE firm Apollo Global Management was one I couldn’t turn down. In the past few years, it is great to see the transformation of Merx from a platform-light business model to a full-scale operating lessor.

Jetrader: What are you most excited about as you transition into your role as ISTAT president?

GB: We have a saying in sport, which is that you are only holding the jersey for the next person. I am very grateful to have served on the board with many ex-presidents and look forward to their continued counsel as I navigate my way through the next two years.

As I stated in Orlando, I have three items on my agenda that I would like to see developed further:

1. Diversity and inclusion
2. Promoting education initiatives, in particular the ISTAT Executive Education Program
3. Developing ISTAT in China, which started with ISTAT Asia in May, and will continue with the ISTAT China Forum in 2020

Jetrader: For young people considering a career in aviation, what thoughts would you offer?

GB: It’s a career that continues to afford me great opportunities to meet fantastic people and travel to cool places. Playing street cricket with David Swan in the back streets of Colombo with what seemed like thousands of kids is a favorite of mine. Notwithstanding the fun side that everyone sees, there is an awful amount of hard work that is required, and no one will hand you it on a plate. It is important to listen, learn and read. Read as many articles as you can. Embrace your surroundings, take as many opportunities to speak with the industry veterans — the same mistakes made 20 years ago are still being made today. I used to love, and still do, anecdotal stories I hear from the likes of John Feren, Pat O’Brien, Phil Bolger, Dick Forsberg, Jep Thornton and Colum Carr, among others. I find them great sounding boards and have the utmost respect for their continuing accomplishments. It’s true that most situations have been experienced by someone before, so if you ask and listen then you may get some of the solutions to your problems earlier than you originally thought.

Jetrader: What distinguishes ISTAT from the growing number of aviation organizations in our industry?

GB: ISTAT being a not-for-profit organization is a game-changer. Not only do we provide the best networking events for our membership, but it’s run by a board of aviation executives who do it for free. The growth of the ISTAT Foundation and the fact that ISTAT was able to get the AirLink up and running and provide millions of dollars over time to people that face socioeconomic challenges is fantastic. Long may it last that we continue to be a society for the membership and provide funding for fantastic causes undertaken by the Foundation.

Jetrader: Over your career, who are the visionary leaders you were influenced by, and why?

GB: Not to take away from the many fantastic people with whom I have worked alongside, I think that the two true visionaries were Dómhnal Slattery and Peter Barrett. Dómhnal had the uncanny ability to convince everyone to jump on board and get everyone to row in the same direction. His enthusiasm and hunger to succeed were insatiable, as was his continuing focus to make everyone understand that the industry is founded on relationships. Peter’s drive and ability to shape a business into a mature organization and make it one of the world’s leading aircraft leasing businesses was great to watch. While both have their own management styles, they have been without a doubt extremely influential in my career and how I look at things. I am very grateful to have had two industry icons be part of my career so far.

Jetrader: What are the top five challenges facing aviation in the next 10 to 20 years?

GB: 1) Safety should always be on top of everyone’s list. Notwithstanding tragic recent events, this continues to be the bellwether of a successful aviation industry; 2) Re-fleeting of the
narrowbody and widebody fleets; 3) The reaction to inevitable downturns by new aircraft lessors, particularly those from Asia.; 4) People, and the continuing ability to attract talent; 5) Greater diversity and inclusion in aviation.

Jetrader: What excites you about where the industry is headed 10 or 20 years down the road?

GB: Retirement for me! No, just kidding. I don’t think I can ever retire from this industry. Too much fun. The industry is becoming more commoditized, which is fantastic as we get more sophisticated investors coming into the space and, with that, new ideas. We are still very much an infant industry in terms of leasing and financing, so the growth and product development potential is enormous. We will, of course, have new technology both in terms of aircraft and in terms of how we manage them. Terms like blockchain were unheard of a few years ago and now are on the tip of everyone’s tongue. Personally, I look forward to seeing some of those grads I helped train become the next aviation leaders and being able to hopefully help some more develop their careers in this fantastic industry we are all lucky to be a part of.