Major aviation report identifies Derry as ideal for new air hub that could create hundreds of jobs

Joe Gill says a maintenance hub in the city could create hundreds of jobs.

He was speaking to the ‘Journal’ during a visit to the city to brief City of Derry Airport, Council and Invest NI officials on a ‘A Pathfinder for Irish Aviation’.

Derry features prominently in the report which was commissioned by the influential Irelandia group.

One of its most eye-catching proposals is the establishment of ‘a world class engine overhaul facility in Ireland, in Shannon or Derry’.

Mr. Gill, a Director of Corporate Advisory with Goodbody Capital Markets, who co-authored the report with Eamon Brennan, former Director General of Eurocontrol, said Derry has all the requirements for a MRO base.

“Derry is one of the two we have identified because it's got the space, it's got the opportunity. It has shown itself in the last ten years that it has an appetite to do this.

“If you think of its proximity to third level institutions in the North West; if you think of its proximity to the aircraft manufacturing and aerospace cluster that exists in NI where there is a heavy flow of apprentices produced each year - these are essential to make a MRO facility work really well.

"So we are saying that if you can bring together the industry with the Irish Strategic Investment Fund (ISIF), with the Aerospace Technology Institute (ATI) in the UK, with Invest NI and with the engine manufacturers and the airlines and lessors you could put together a project that could bring a facility to an airfield like Derry that could employ hundreds of people.”

The report highlights Ireland’s outsized role in aircraft leasing globally and how this presents a huge opportunity for the industry and Derry.

"In NI you have over 80 companies that are heavily focused on manufacturing, engineering and technology around aerospace and commercial aviation.

"In the South you have aircraft leasing companies and airlines that between them own over 10,000 commercial aircraft worldwide and over 23,000 commercial engines. That's about a third of the total global fleet.

"To put that in context aircraft passengers to and from the island of Ireland account for only 1% of the global market so we massively over-index in the world of aviation.

"In NI you have particular strengths such as producing wings for the Airbus A220 in Belfast. You are a major supplier of commercial aviation seats for the global fleet and you have a whole array of technology companies that are expert in supporting everything from drones to manned aerial vehicles and commercial aviation. So we are arguing that there could be an all-island approach to developing aviation,” he says.

Almost ten years ago a proposal to develop a MRO at CoDA as part of a £7.5m investment did not advance beyond a scoping exercise.

“I think that was really heavily impacted by Brexit and COVID which completely capsized the whole aviation industry for a period of time but as I understand it various stakeholders in this area are very keen to get this back up and running,” Mr. Gill remarks.

The report further recommends the creation of a €40m pilot training loan fund from ISIF and the promotion of Ireland as ‘a centre of excellence for pilot training with a focus on smaller underutilised airports including Waterford, Sligo, Derry and Weston’.

It says Air Passenger Duty (APD) tax should be abolished in the North.

This will allow Derry to ‘share in the benefit in having that tax break, encouraging tourism’, says Mr. Gill.

One of the key asks has already been answered: the reestablishment of the Public Service Obligation route to Dublin. This will happen next year.

“That is an early win and it is great to see it,” he says. “I think it is going to be really important in providing connectivity between the North West and Dublin especially on the back of the bad news about the A5 road that came through this week.”

Are the implications of the A5 ruling – based on breaches of climate legislation – a concern?

“It's got to be addressed but in fairness aviation accounts for less than 3% of global emissions. If you think about the construction industry, it accounts for 20% of global emissions but no-one ever talks about, when you build a house, the environmental impact,” he says.

Mr. Gill refers to how Aer Lingus and Ryanair have committed to incorporating sustainable fuel at ‘a much higher rate than Europe’ and how Ireland has the youngest fleet in Europe. He further points to the European Commission’s Single European Sky (SES) initiative.

“That is designed to take all the kinks out of air travel over Europe which are legacy of the Second World War. If you did that alone you could cut emissions by 10% in aviation.

“If you don't have highly efficient air services on and off the island of Ireland you are not going to be able to enable Foreign Direct Investment (FDI), tourism and indigenous Irish industry to create the hundred of thousands of jobs needed over the next 20 years to ensure we don't go back to the spectre of structural emigration in this country.”

‘Pathfinder’ has the backing of industry heavyweights. Irelandia’s Chairman, for example, is Dr. Declan Ryan, founder with his late father Tony of Ryanair, now Europe’s largest airline and the third biggest worldwide.

Mr. Gill and Mr. Brennan canvassed 33 industry leaders – including Michael O’Leary (Ryanair), Lynne Embleton (Aer Lingus) and Willie Walsh (IATA) – on the future of the industry. The ‘Pathfinder’ report is the result.

“It is now about campaigning around it,” says Mr. Gill.

"We are getting a very positive reaction from key influencers and key decision makers. We hope that will trigger some activity over the next 12 months.”