Depending upon the revenue model and the operational styles, airlines might opt for a dry or a wet lease.
Cape Town Treaty
In 2001, an international treaty known as “The Cape Town Treaty” was signed to help address concerns in mobile equipment, including global aviation.
The treaty helps protect the rights of owners and financiers of mobile equipment, such as aircraft, helicopters, and other movable property.
By establishing a clear framework, the treaty ensured that these assets could be effectively reclaimed if lessees defaulted on their payment obligations.
The Cape Town Treaty made it easier to reclaim equipment and clarified creditors’ rights, boosting confidence among investors and lenders.
Fifty-three countries initially signed the treaty, including Ireland, demonstrating an international commitment to improving the legal frameworks governing mobile equipment. However, Italy did not participate.
Photo: UNOOSA.org
When an Italian airline fails to pay on the lease for an aircraft registered in Ireland, repossession is straightforward and can quickly occur. However, the situation becomes more complicated if the leased aircraft is registered in Italy.
In this case, if the airline defaults on a payment, the aircraft’s owner will face challenges in the recovery process. The owner must start legal proceedings in a local court, and repossessing their aircraft can potentially stretch over several years before a final resolution.
Related Increased Demand: Why Aircraft Leasing Rates Have Spiked By As Much As 30%
The practice is proving increasingly profitable.
Ireland has low taxes for air leasing companies
Ireland is the country of choice for aircraft transactions and has favorable tax laws for large corporations. One in five leased commercial passenger aircraft is registered in Ireland.
The industry is built on nearly 50 years of experience since Guinness Peat Aviation was founded in 1975. Aircraft leasing companies account for 2.6% of Ireland’s gross domestic product. Corporation tax in Ireland is 12.5% in the aircraft leasing sector, and leasing companies can claim back all their expenses.
Airlines have realized that leasing is important for their long-term growth. Leasing helps them manage cash flow and increase their fleets to meet passenger demand. Irish carriers can operate services on any route within the European Community.
The EU and the United States have an open skies agreement, which allows any licensed airline from either region to fly between any point in the EU and the US. Ireland also has around 29 bilateral air service agreements with other countries.
The Irish Department of Transport works to increase these agreements to provide safe, reliable, and competitive air services that connect Ireland with important business and tourism markets.
Photo: IBEC
Air cargo operators can lease aircraft through either operating or finance leases. In Ireland, there is no withholding tax on lease rental payments made by Irish operators, whether the leases are operating or finance leases.
Operators can also raise debt financing to buy aircraft. Ireland provides exemptions from interest withholding tax, so Irish air cargo operators can usually get funding from major banks and capital markets without paying withholding tax.
The leasing sector has been instrumental in supporting the growth of new airlines entering the market. Additionally, it has promoted the development and use of next-generation aircraft, leading to substantial improvements in airline operating economics and fuel efficiency.
Photo: ITA
The Irish Aviation Authority
The Irish Aviation Authority (IAA) is a commercial semi-state company and the civil aviation regulator for Ireland. It regulates to the highest professional standards to ensure a safe, secure, and consumer-focused aviation environment.
IAA’s safety regulatory functions include:
Certifying and registering aircraft airworthiness Licensing personnel and organizations involved in aircraft maintenance, Licensing pilots, air traffic controllers, and aerodromes Approving and monitoring air carrier operating standards. Registering drone operators Schedule coordination/slot allocation at Irish airports Licensing the travel trade in Ireland Airlines license and approval of ground handling services provider Monitoring and regulation of EU legislation covering Air Passenger Rights and the provision of assistance to passengers with reduced mobility
Photo: IAA
Future of aircraft leasing in Ireland
In 2017, Aircraft Leasing Ireland (ALI) was established to represent the needs of the sector in Ireland. ALI now represents 31 leasing companies that ensure the continued development and success of Ireland’s aircraft leasing industry by working collaboratively with the Irish Government and other stakeholders.
Photo: ALI
The World Leasing Yearbook said, “The role of ALI is to also address some of the challenges that the sector is facing and how we can make it an even better sector for the future. This means addressing areas like future education and skills needs and maintaining the vibrant ecosystem that has been created here.
The World Leasing Yearbook covers the world’s leasing and asset financing markets in one volume.
Ireland has become a top spot for aircraft leasing, financing, and air cargo operations. Its favorable tax system, double-tax treaties, and numerous air service agreements attract investment.
The country has nearly half a century of expertise in the field. With a government focused on supporting the industry, Ireland is ideal for air cargo operators to set up their businesses.
Photo: Skyteam
Source link : http://www.bing.com/news/apiclick.aspx?ref=FexRss&aid=&tid=67260ce99d0b40a6b63d073a0c1106c4&url=https%3A%2F%2Fsimpleflying.com%2Fwhy-italian-planes-have-irish-registrations%2F&c=1984178484130140137&mkt=de-de
Author :
Publish date : 2024-11-01 22:05:00
Copyright for syndicated content belongs to the linked Source.
