Aces high: It’s time for us to soar in aviation

21 Jan 2019950 Views

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Ireland is now a central business hub of the aviation and travel world, and it’s high time we played to that strength, urges John Kennedy.

“This is a fucking monster,” said Michael O’Leary, CEO of Ryanair, in a magazine interview I did with him around the year 2000, just as the airline began to dominate the skies of Europe and was becoming a household name. O’Leary was talking about the internet and e-commerce, and how it converted 70pc of bookings to digital in just a year.

If you ever want a case study in what digital transformation is all about, look at Ryanair, which went from a backwater carrier to the biggest airline in Europe thanks to digital. While its initial website was built on a shoestring budget by two 17-year-olds, Ryanair is now a serious player in digital and fosters ambitions to be the Amazon of air travel.

The blending of aviation with technology appears to come natural for the Irish. But you see, while our tech economy is booming – as proven by Salesforce’s 1,500-jobs announcement last week – the reality is that every business is becoming a digital business, and yet there is very little spotlight put on Ireland’s prowess at aviation and travel.

I don’t necessarily mean actual flying – although some of the earliest flying aces in World War 1 were Irish – but the actual business of aviation. Or the business that goes around aviation.

Not many people realise, for example, that the very concept of airport duty-free shopping – now an $89bn global business – was pioneered by a Clare man called Brendan O’Regan, who realised that the young airport at Shannon in the late 1940s faced annihilation because it could be displaced as a transatlantic stopping station for seaplanes and the like due to the onset of jet travel. Boxing clever, O’Regan was on the way back from a fact-finding mission to the US when he had a ‘Eureka!’ moment on an ocean liner and realised that if luxury goods could be sold on a boat, they could surely also be sold on arrival by plane. After experimenting with the sale of whiskey from a timber hut outside the terminal at Shannon, O’Regan opened the first duty-free shop in the world at the airport in 1947. The idea caught on, with cities such as Amsterdam soon following suit and so on.

The idea inspired Irish-American philanthropist Chuck Feeney to establish Duty-Free Shoppers Group in Hawaii in 1962, which went on to become the largest duty-free retailer in the world.

The tradition continued when Ballinasloe native Colm McLoughlin, who earned his spurs as a young manager at Shannon Duty Free, established the largest duty-free operation in the world, Dubai Duty Free (DDF), at Dubai International Airport. DDF had a turnover of more than $1.9bn in 2017.

A destination for start-ups

Aside from the booze, perfume and fags, Ireland has become a destination for the important business of running airlines as well as leasing aeroplanes.

Estimated in 2016 to be worth up to €4bn and employing 40,000 people, the aviation sector is a major contributor to the Irish economy, with many of the largest aircraft-leasing firms based here. It is understood that there are 50 aircraft-leasing companies based in Ireland that employ 5,000 people between them. In 2017, CAE Parc Aviation announced 80 new roles across Shannon and Dublin.

This week, two major international aviation conferences in Dublin – the Airline Economics gathering and the Airfinance Journal conference – are expected to contribute at least €9m to the Irish economy as 5,500 aviation executives glide through Arrivals.

But it isn’t just the established business of aviation we need to think about. What about the start-ups? Through the example of O’Regan, Feeney and McLoughlin as well as O’Leary today, there is an entrepreneurial spirit that is clearly evident when it comes to the business of flying.

Last year, Enterprise Ireland followed up the success of the Propeller aviation start-up accelerator with phase two of the programme. The Propeller Shannon accelerator aims to drive the development of innovative start-ups in the aviation, aerospace and travel tech sectors. It is a partnership between Shannon Group’s International Aviation Services Centre and DCU Ryan Academy for Entrepreneurs, and is supported by Enterprise Ireland, Boeing, Datalex and the Irish Aviation Authority.

Moving on to the digital aspect of the aviation industry, tech services player Comtrade this time last year held a two-day hackathon to explore how blockchain technology could have a positive impact on the aviation industry. It reasoned that blockchain could be the key to major improvements in updating processes, creating new business models, enriching loyalty programmes, and unlocking new levels of service to benefit passengers and airlines alike.

A University of Limerick-based start-up called Arralis is already taking on some of the giant electronics players focused on aerospace, and is winning. The company, which was established in 2013 by aerospace engineer Barry Lunn (CEO) and Mike Gleaves (CTO), has won major contracts with the European Space Agency, the UK Ministry of Defence, Beijing Bluesky Aviation Technology and Sinotek.

In 2017, Irish tech firm OpenJaw Technologies emerged from the clouds of a tangled M&A deal and soared to new heights to create 200 jobs. OpenJaw has noted some of the world’s biggest airlines as customers, including British Airways, Cathay Pacific, Dragonair and Iberia.

But it isn’t always good flying weather for Irish travel tech firms. Last week Datalex saw its share price plummet after it revealed an accounting error caused it to misstate earnings. But, despite the market turbulence that ensued, Datalex is in it for the long haul. Datalex’s digital commerce platform is used by global airlines including Aer Lingus, JetBlue, Lufthansa, Philippine Airlines, Swiss International Air Lines and Virgin Australia, and enables a travel marketplace of more than 1bn shoppers across the globe.

This prowess at aviation – or more so the business around aviation – needs to be further explored and we need to launch more start-ups in this area.

Ireland is no longer a remote Atlantic outpost, but increasingly it has become a global hub with a track record that includes many air miles of achievement in technology and entrepreneurial instinct.

As the storm clouds of Brexit descend, if we play our cards right and continue to box clever, there could be blue skies ahead. Chocks away!

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Updated, 1.56pm, 21 January 2019: This article was updated to clarify that Dubai Duty Free was first established at Dubai International Airport, not Al Maktoum International Airport.

John Kennedy is an award-winning technology journalist who served as editor of Siliconrepublic.com for 17 years.

editorial@siliconrepublic.com