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Robert Martin’s longevity as the chief executive and managing director of BOC Aviation since 1998 is nothing short of remarkable, given the upturns, downturns and everything in between he has witnessed over that time that has made him such a respected voice in the industry.

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At the end of the year, Martin will hand over the reins to his longtime deputy and chief financial officer, Steven Townend, in a transition that he admits has been a long time in the planning.

“Steve has been with me for 22 years, so he has been patient. He did say in his interview he wanted it – I made him sweat,” Martin quips in a recent interview with Cirium in Singapore, only days after his impending retirement on 31 December was announced.

With such a long run across the industry and having led the company from its start as Singapore Aircraft Leasing Enterprise, through its sale to Bank of China in 2006, and its listing on the Hong Kong Stock Exchange in June 2016, Martin nominates his highlight as being the team he has built over that time as his proudest achievement.

“To me definitely the highlight was basically keeping the team together, seeing the people grow through the company, and now seeing a number of people who joined.

Martin nominates “maintaining alignment” between employees and shareholders as his second greatest achievement.

“To me, this is absolutely crucial, no matter what business you’re in. You find a lot of companies that are run by management, it really doesn’t have reference to what the shareholders want. That’s never the way we’ve run this company.

“We’ve always been aligned with the shareholders ever since the original investment by Singapore Airlines and Temasek and GIC back in the 1990s.”

Over his time, there has been no shortage of crises that Martin has presided over, including the September 11 terrorist attacks, SARS pandemic in Asia, the Russian invasion of Ukraine and the 2008 global financial crisis.

But rather than challenges, they have turned out to be key growth milestones for the lessor, as the “focus on long term shareholder value meant that we were able to turn crises into opportunities”.

He admits however that Covid went on longer than expected and was for a number of reasons the darkest period for the company, largely because of not being able to physically be in offices together for a portion of that time.

Another major challenge has been dealing with the fallout of the Russian invasion of Ukraine, which has seen BOC Aviation go through several different avenues – including suing its own insurers – to recover the value of its assets that remain stranded there.

Nonetheless, the recovery of the broader industry post-Covid has now provided the right timing for Martin to make his transition.

“This is a good time for us to do that. And so we’ve been planning this for a fair period, you can count it years, not months,” he says.

State of play

Whether it is at a conference keynote, or in closed rooms, Martin has never been shy of sharing his opinion of the dynamics of the leasing and aerospace markets.

Broadly speaking, he sees the current circumstance as a “reasonably normal market, perhaps high interest rates, but they’re not high. They’re just back to the average of last 25 years”.

Asked about consolidation in the industry, Martin maintains his long-held scepticism, noting that the market concentration of the top 10 lessors has been trending downwards.

But he concedes that there are still some merger and acquisition deals that are being shopped around among lessors.

“We’re aware of at least five for sale, and it’s mainly exit of private equity, or where hedge funds have ended up as the equity in the companies,” he says.

Martin adds that in the case of private-equity backed lessors, they may end up under pressure from their shareholders to realise their investments.

“The guys who haven’t gotten to $10 billion yet, I’m afraid that their private equity will just get bored and want to go and play in a different market, because now there’s distressed housing to play in a much bigger market.

Martin also notes that with operating lessors now accounting for over 50% of new aircraft deliveries, they have become the primary provider of liquidity for airlines – but this is no cause for celebration.

“This is very bad, because there’s a lot of things that people use working capital for and not all of them strictly related to the aircraft.”

He notes that this creates a situation where “the other suppliers become the working capital, it could be engine MROs, it could be ourselves, it could be Airbus or Boeing. But it’s not banks, which it really should be. That’s what banks are for.”

Next steps

While he steps away as chief executive at the end of this year, Martin is going to remain on the board of BOC Aviation as a non-executive director.

That aside, he says that he is also going to work on some projects with Cambridge University, lending his finance experience to raising funds to assist in research into Parkinson’s Disease, autism and rare diseases.

There is no doubt though that from his long experience, he will continue to be a leading voice in the aviation industry for many years to come.

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READ PART 2 OF THE INTERVIEW WITH BOC AVIATION’S NEW CEO, STEVEN TOWNEND.

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