The appointments of James Meyler, the longstanding Chief Executive of ORIX Aviation, and Kei Kitagawa, the Deputy Head of the Global Transportation Services Headquarters (of which ORIX Aviation is a part) as executives of ORIX Corporation from January 1, 2025 marks another step in the Japanese corporate group’s development into a truly global organization that is active in diverse financing and investment businesses around the world.
These promotions are perhaps no surprise, given that Mr. Meyler and Mr. Kitagawa are part of the Aircraft and Ships Segment, which boasts one of the highest returns on equity in the Group and contributes nearly a tenth of Group profits.
But there is more to these promotions than that. “I see it very much as a signal that the company wants to internationalize senior management to match the increasingly global nature of the Group,” Mr. Meyler observes.
A large proportion of ORIX Group’s profits are generated outside Japan, from fund manager Robeco in Europe to the lending and asset management businesses grouped under ORIX Corporation USA, the various leasing and finance operations across Asia and Australia and, of course, ORIX Aviation in Dublin.
Mr. Meyler, an Irishman, is the first of ORIX Corporation’s roughly 35 Group Executives who is not Japanese, of Japanese heritage or based in Japan. This appointment reflects the global presence of the Group and its international mix of businesses.
A second consideration is to empower the next generation of the company’s management. This has already been manifested in the appointment of Hidetake Takahashi, 53, the Head of the Energy and Eco Services segment to President and Group COO from the start of this year, with previous President Makoto Inoue moving up to Chairman while remaining Group CEO.
Messrs. Meyler and Kitagawa are both in their 40s at the time of their appointments and are part of that rejuvenation. Indeed, most of the management team at ORIX Aviation is in their late 30s or early 40s, and the relative youth of the company’s leadership sets a good example for other businesses in the Group. “I would argue that ORIX is actually more advanced than many Japanese companies when it comes to promoting younger executives and building a diverse management team,” says Mr. Kitagawa.
However, the most potentially significant contribution that ORIX Aviation can make to its parent is to help enable the further growth of ORIX Group by looking at how to apply its business model to the Group’s other businesses.
In principle, leasing an aircraft is not that different from leasing a car or a computer, though obviously the ticket is much larger and that requires more specialized market knowledge. What sets ORIX Aviation apart, however, is that it generates income not only from its operating business of leasing out airplanes, but also capital gains from trading these assets and fee income for managing leased aircraft on behalf of its financial customers.
The combination of three revenue streams, with only the first requiring use of its own balance sheet, is the key to producing returns above the industry average and one of the highest within ORIX. This is reinforced by ORIX Aviation’s 30% shareholding in Avolon, the world’s second largest aircraft leasing company including their significant orderbook, allowing it to benefit from a very large business without having to commit its own balance sheet.
Mr. Meyler, who previously worked for Guinness Peat Aviation and Ryanair founder Tony Ryan, helped to develop this ‘asset light’ approach once he joined the business in 2003, by developing core relationships with airlines on one side but also with big asset managers and private equity firms on the other. He also works closely with investment banks and has developed in-house tax and legal expertise to ensure deals are optimally structured.
He believes this fee-focused ‘asset management’ approach can be replicated across a number of ORIX businesses from real estate to renewable energy. “If you think about it, Elawan’s real skill is operating solar and wind farms rather than just building them,” he argues, referring to ORIX Group’s Spanish renewables subsidiary, Elawan Energy. “There is lots of capital out there that lacks such expertise and is willing to pay for it.”
Mr. Meyler is now part of ORIXs executive committees, giving him knowledge of projects and deals elsewhere in the Group and the ability to open doors and connect people. He reports that this is already seeding new business opportunities.
In addition, it will now be easier for him to pick up the phone to fellow Group Executives, particularly his Japanese colleagues. He will also travel to Tokyo more often, which will provide chances for informal networking as well as formal meetings.
Messrs. Meyler and Kitagawa agree that their business truly embodies ORIX’s new Purpose of ‘Finding Paths. Making Impact.’ “ORIX Aviation is one of the most successful businesses in the Group in terms of integrating with Japan, where we have mutual respect and exchange personnel. We are a case study of how to operate a distinctive business and culture while maximizing the mutual benefits of a Western and Japanese style,” they agree.
This is an important message to spread throughout the Group as it works to unify globally under its Purpose & Culture and Messrs. Meyler and Kitagawa are confident this type of mindset will become more common and recognized within the Group in the years to come. And in the meantime, there is ample opportunity for the two of them to help other parts of the Group realize untapped potential by learning from aviation leasing’s innovative business model.
