ISTAT News | 01 September 2019

Jetrader: Q&A With Peter Barrett

Jetrader: When you began your career, did you have any long-term goals in the industry, or was it something you thought you’d only be involved in for a short time?

Peter Barrett (PB): I studied engineering at university here in Ireland, and then I went to work for a company that was then called Andersen Consulting, which is now Accenture. At the time, GPA was a very successful and well-known company in Ireland, so, as a young person, I wanted to try to get in there. I applied, did a lot of interviews, and got a job. I had no particular interest in aviation per se, and I certainly didn’t have any longterm goals 30 years ago when I got into aircraft leasing. It happened by chance and good luck.

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

PB: It’s an interesting business. Also, when you get into a career, you tend to stay in it. But it is an interesting industry. It’s global, and you deal with many different kinds of things from finance to geopolitics to legal to managing people. It’s a complex industry, and it’s engaging, so that’s probably the principal reason. It’s also rewarding. But, ultimately, like a lot of things, I did reasonably well in it, and when you’re doing something, you enjoy it and you’re moderately competent at it, you tend to keep doing it.

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

PB: It’s much bigger. There are a lot more leasing companies and a lot more aircrafts are leased. Aviation in general is bigger. That’s probably the principal difference. When I started off nearly 30 years ago, aircraft leasing was a kind of niche product of an entrepreneurial industry that was finding its feet. Today, 40%+ of airplanes are leased, and it’s the financing tool of choice for most airlines and a dominant product in aircraft financing. It’s very much a mainstream product. Businesses are now generally owned by big financial institutions.

They’re much bigger than they were. They’re much more structured and institutional in their nature. The other thing that strikes me — I was chatting to my kids recently about this — is when I started doing this, there was no email, there were no mobile phones and there was no internet. Everything was done by telephone and fax. When you were traveling in the early ’90s, you arrived at a hotel somewhere in the world and there were a bunch of telephone messages and a bunch of faxes waiting for you. That’s how you communicated. When I think about the world now, that really strikes me as the biggest change. The world, how we communicate and how we share information has completely changed in the 30 years I’ve been working. It’s easier to communicate now, but there’s also a lot more noise. There’s a lot more information, and trying to decide what information is useful is a challenge. Everything moves much faster; things happen more quickly. Connections are made more quickly, decisions are made more quickly. It’s a different pace, and I don’t think that’s unique to aircraft financing or aviation.

Jetrader: How did you get started at SMBC? What made you leave Guinness Peat Aviation (GPA)?

PB: GPA was effectively taken over to become GECAS, and I worked for them for a while, then I moved to work for a bank, which is now called KBC. I joined SMBC Aviation Capital as a chief operating officer when the business was effectively being started as a leasing company 18 years ago. It was, like a lot of these things, about the people you know and your connections. It’s a relatively small industry, and things generally happen because you know people.

Jetrader: Have you seen ISTAT change?

PB: I’ve been a member of ISTAT since I joined the company. ISTAT is much more global. It’s changed a lot in the last 10 years in particular. The organizations have become more global, inclusive and diverse. We still have work to do in that regard, but we’ve come a long way.

Jetrader: How did Ireland became such a big player in the airline and aircraft leasing industries?

PB: There’s a number of different factors. Ireland is an island, and its geographic location is important. The first transatlantic flight landed here. It was a big place of transatlantic stopovers before the advent of the longer-range jets. Aircraft leasing really comes down to Tony Ryan, his influence and the influence of GPA. Undoubtedly, Tony was a true entrepreneur who saw an opportunity and created an industry, or was at least one of the most important progenitors of the industry. He had a great ambition for the business and that became GPA. And then around GPA grew up an infrastructure of people, expertise and knowledge and a regulatory environment and a tax environment that promoted all of that. One thing fed off the other, and I think that allowed the industry to grow in Ireland.

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

PB: A lot of people have influenced my career over the years. I don’t think they’re all necessarily visionary; I’m not a big person for visions myself. I think the colleagues who I work with every day are very important. I learn a lot from them. I’m a big believer in businesses with good integrity and quality execution that continue to drive forward, avoiding hubris and avoiding complacency and that sense of constant needing to improve your business. I’ve seen good and bad things in all businesses I’ve worked in. You try to take the good things and learn from the not so good things. That’s what I try to do. I don’t look back to my 30 years and think there’s one individual person who had a momentous impact on me. It’s been a compilation of things.

Jetrader: What are the top five challenges facing aviation, and specifically the leasing market, in the next 10 to 20 years?

PB: In the short term, I think maintaining a good balance between risk and reward is a challenge. There’s a lot of competition and a lot of capital for reasons that are extraneous to the aircraft leasing market. It’s been a very good home for capital and, given the monetary policies around the world over the last 10 years, a lot of it has come into the space. Maintaining discipline over the risk and reward of that capital continues to be a challenge. It’s something that, as an industry, we need to be conscious and aware of. In the longer term, I think the aircraft leasing industry, like other industries, is going to have to be ready for disruption and change. Sometimes I feel we as an industry haven’t changed enough because we haven’t needed to, but the risk of disruptive change to an industry like ours is something we need to stay aware of. We need to be much more attuned to the use of data and information in our business. That’s something we’ve been working hard at at SMBC Aviation Capital. We’re trying to make ourselves more future proof and future ready. Ultimately, we need to be responsive to our customers. It’s absolutely critical for any industry. We need to be aware of to their changing needs and demands. We strive to do that here every day, and we’ll need to continue to improve on that to grow the business.

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

PB: Technology is an important part, but it’s more about information and how we think about information and risk. For me, people are the most interesting thing in our industry. As an industry, we have to make sure that we continue to bring in not just people who are good at numbers or aircraft, but also people who understand information and data and how to analyze and use it. I think if we can continue to do that, we can continue to drive the industry. I think the challenge is to make sure we’re bringing in the best and most capable people to our industry, and that’s something we endeavor to do at SMBC Aviation Capital. We have a very active graduate program, but we also recruit a lot of people from other industries and businesses, and we will continue to do that to improve the overall mix of DNA in the company. That’s one of the things I admire about ISTAT is the ISTAT Foundation in terms of bringing new ideas and new blood in. Without that, over time we will atrophy and not be able to meet our customers’ needs. Gerry Butler, who started his career with us, is a great example of someone in our industry who continues to seek out the next generation. I just came from one of our focus groups on equality, diversity and inclusion here in our business, and I was chatting to my eldest daughter about this last night. She accompanied me to ISTAT in Singapore last year, and it struck her walking across the room that there were very few women in the room. If it’s that obvious to an 18-year-old, it’s clearly something we need to address. We need to improve not just the number of women but the number of women in leadership positions. It’s important to the industry, and our company and ISTAT can lead in that regard.

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

PB: In business, and in any career, you’ve got to work hard. You’ve got to build relationships. All business is about people: your colleagues, your customers, your competitors, your suppliers. Working well with people can make a real difference in your career. I wish I’d known that earlier in my career; I’d have made fewer mistakes.

Jetrader: Anything else?

PB: The key message I would give is that aircraft leasing is an important part of the ecosystem of air travel, which is important in an increasingly fractured world. The ability to travel around the world, which we take for granted, is important. We shouldn’t lose sight of the fact that we’re part of that system.