22/07/2024
Ciao, Algeria, arrivederci!
Anybody else wonders why the (ex) pride of Italy, ex-Alitalia (now ITA Airways, Italia Trasporti Aerei Airways) fly aircraft registered in Ireland? That includes all the former Alitalia planes now flying for ITA that used to be registered in Italy and now boast Irish flag on their tails. Remember, Alitalia bankrupted at the beginning of the pandemic (and Desert Soul didn't).
Here's the fascinating answer:
The answer is twofold. In 2001 several countries got together to sign a treaty called "The Cape Town Convention on International Interests in Mobile Equipment."
It was designed to ensure that the owners of high-priced movable objects, such as aircraft, could be recovered if lessors defaulted on payments. Eighty-four counties, including Ireland, signed the treaty, but Italy and Russia did not.
It would be difficult to repossess a plane registered in Italy
This means that if an Italian airline fails to make a payment on the lease of an aircraft registered in Ireland, it can quickly be repossessed. However, if the leased aircraft was registered in Italy and the airline defaulted on a payment, the plane's owner would need help getting it back.
Despite Italy being in the European Union, the aircraft's owner would have to navigate the Italian judicial system. They would first need to start at a local level and then work up to a higher court, with the entire process possibly taking years to resolve.
Secondly, Ireland has very favorable tax laws for large corporations. Guinness Peat Aviation was the first aircraft leasing company to select Ireland in 1975. Others soon followed, including the world's fourth-largest aircraft leasing company SMBC Aviation Capital in 2012. Today one in five leased commercial passenger aircraft is registered in Ireland. Ireland is a beneficiary of this, with aircraft leasing companies accounting for 2.6% of the nation's gross domestic product (GDP).
Corporation tax in Ireland is 12.5% in the aircraft leasing sector, and under section 110, leasing companies can claim back all their expenses.
Source: https://simpleflying.com/italian-aircraft-irish-registrations-guide/