Ireland’s quite extraordinary success as a global aviation leasing hub is well documented. Over 60 per cent of the world’s aircraft are managed from Ireland while 14 of the world’s top 15 aircraft lessors are based here. What is perhaps less well known is the equally remarkable performance of Irish companies like Miagen who are supporting the sector.

Miagen’s LeaseGen financial planning solution is now used by seven of those top 15 lessors, including SMBC and Avolon, the world’s number two and three respectively. Even more impressively, more than one fifth of all leased aircraft globally valued at more than €100 billion are managed using the company’s technology.

“I founded the company 22 years ago,” says Miagen CEO Teddy Murphy. “My background is in management accounting. A lot of people in finance back then ended up just doing Excel work. I set up the business to help those people build models.

“Over time, we adopted newer and better technologies and moved to the cloud. As we evolved, we started to focus on different industries like aviation. We started to build our own solutions for those industries. Our solutions helped the finance team to present information to help the board and the CEO make better decisions for the business.”

Business model and growth strategy

Today, Miagen employs 16 people. “We’re not very people-heavy, but we are very focused on recurring revenue and building out our markets,” Murphy explains.

“RouteGen was one of our earlier solutions for the airline industry. We developed LeaseGen for the aviation leasing sector after that and it is now our biggest solution.”

The company launched GreenGen last year to help organisations meet their Corporate Sustainability Reporting Directive (CSRD) requirements.

SportsGen, its latest product, helps elite football clubs avoid regulatory penalties and plan their increasingly complex finances with greater accuracy.

As Murphy sees it, Miagen is akin to a “high-performing boutique consultancy”. “We’re like a small Big Four firm, but we are very specialised—most of our team are accountants who came to us from one of the Big Four.”

According to Miagen’s Chief Operating Officer Brian Byrne, the company’s new SportsGen solution more or less replicates what LeaseGen does for the aviation leasing industry.

“Essentially, we’re trying to take what we did in aircraft leasing and move it into football clubs as regulation and financial scrutiny are becoming a much larger part of their game,” he says.

“We launched SportsGen in September and the market reaction has been very good. We’re hoping to sign a few clubs before Christmas.”

The solution allows clubs to run quite complex scenarios to support decision-making. “Things like, ‘what happens if we finish third in the league versus 10th?’, ‘what happens if we go on a run in the Champions League, or if we get relegated?’,” Byrne explains.

“The solution shows what the impact is likely to be on the profit and loss account on the balance sheet, as well as how it might affect regulatory compliance.”

Explaining the complexity clubs face, Byrne points out that when they buy a player, they often commit to staged payments over a number of years. This needs to be factored into both long- and short-term budgeting.

Many clubs are now planning five to 10 years ahead, an immensely complex undertaking the SportsGen solution can help with.

From aviation to tech start-up

Byrne joined Miagen almost five years ago from Arctic Aviation Solutions, the leasing division of Norwegian Air.

“My background has always been in aviation,” he says. “I studied aviation management at the DCU Business School. I joined Aer Lingus for a short stint and then moved to Norwegian Air.

“I slowly slid across into the aircraft leasing entity that sat within the Norwegian Air group and did my Chartered Accountancy exams while I was there.”

His time with Norwegian was eventful to say the least. “I spent about five years there in senior finance roles,” he recalls. “We went from boom to bust very quickly. We were delivering about two aircraft a week at one stage and then we were trying to sell two aircraft a week.”

When he joined Miagen, Byrne was involved in what he describes as “the nitty gritty of building out the models”, particularly the LeaseGen solution.

“I now manage teams split across different areas. We have business consultants who are typically aviation experts or Chartered Accountants.

“We have an integration team which is responsible for hooking up customers’ systems to bring data into our models, and we have a development team that builds out bespoke custom solutions for customers.”

LeaseGen is designed to give lessors a deep real-time understanding of their fleet’s profitability. To achieve this, it integrates data drawn from contracts, maintenance reserves, lease cash flows, impairment modelling, asset depreciation and the different finance structures employed.

“EVERY QUARTER, WE SHARE OUR PROFITS WITH EVERYONE IN THE BUSINESS AND THAT DRIVES INNOVATION IN THE BUSINESS. IT CREATES THIS WORLD WHERE PEOPLE KEEP COMING UP WITH NEW IDEAS. WE TEST THEM AND, WHEN THEY DO WELL, EVERYONE BENEFITS”

“We merge all of that into one single predictive model with the sole intent of allowing lessors to run scenarios to assess deal performance,” says Byrne.

“They can forecast what returns they’re going to get on portfolios and make faster data-driven decisions. We bring the financial statements down to an individual aircraft level.

“They can look at the MSN [manufacturer serial number] of the individual aircraft, see how it has performed in the last three years and forecast what it will look like in the next eight to 10 years and as far out as they want to go.”

Lessors can use this information to run a variety of key scenarios. “During the Covid pandemic, for example, every single lessor wanted increased visibility on what would happen if a certain airline didn’t pay or if another could only pay 50 percent for the 12 months ahead,” Byrne adds.

“These scenarios used to be run on clunky, complex spreadsheets, whereas we’ve brought it into a tailored, scalable solution. Some of our customers have 1,000 active aircraft and they’ve another thousand on order with either Boeing or Airbus.

“If you have 100 aircraft with an airline and, all of a sudden, they’re credit rating is downgraded, they’re a bit riskier. What happens if they fall into not being able to pay or can only pay 75 percent for the next month? LeaseGen can give you an answer quickly.”

Company-wide solution

The solution is not just limited to finance teams. “It typically starts off with a finance team for reporting and forecasting, but it expands across the organisation when the commercial team realises what it can do and wants to use it,” Byrne says.

“Once the risk team sees what questions you can ask and the answers it gives, they start using it. Some of our clients buy a second licence because another team might want to use it for something else.”

It can also help lessors to deal with aircraft shortages and delivery delays. “Lessors are constantly running scenarios to look at what’s happening and get information back to their CFO as quick as possible,” Byrne says.

“What happens if deliveries are delayed by another six months? We’ve got committed orders to airlines to fulfil; how are we going to go out and find the aircraft? What price should we pay?”

On the other side of the equation, airlines might look for lease extensions. “Say, there’s an eight-year agreement in place, but the airline comes knocking on the door after six saying they need to extend for another three years. They have their own expansion plans, but the problem is there are no aircraft there to be had. Our solution helps them plan for that.”

Innovation, research and development

There is no standing still for Miagen. “We put a lot of time and resources into research and development (R&D),” says Byrne. “We have to constantly keep up with the industry and look ahead to what’s happening next.”

The company also has a shipping solution and is on the lookout for other sectors where its technology can be applied.

“We are constantly looking at other industries to see if we can build a solution for them and help companies optimise their business through better financial planning and analysis.”

Sport is currently Miagen’s key new market. “Once we get a few sports clients, then we can move on to looking at the next industry—it takes a lot to launch into a new sector,” Byrne says.

While the strength of its technology is important, Murphy believes culture lies at the heart of Miagen’s success.

“We put about 30 percent of our earnings into R&D, and we also operate a profit share across the whole company,” he explains.

“Every quarter, we share our profits with everyone in the business and that drives innovation in the business. It creates this world where people keep coming up with new ideas. We test them and, when they do well, everyone benefits.

“We also did the Great Place to Work survey this year and last, and we got a 94 percent score. But what I’m most proud of is that we don’t have to tell our people what to do—everybody wants to see how they can add value to the business.”

*Interview by Barry McCall