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flags of convenience

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flags of convenience

Old 27th Apr 2013, 15:54
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Is it a case of the aircraft being registered abroad for financial reasons or operating through an overseas subsidiary?

The former is very common. Many years ago spotting at ZRH I saw a Swissair 747 with an N rather than HB registration, doubtless owned by an American financial institution. The operations would have been no different to an HB registered aircraft, although as a previous post has mentioned the US authorities would have a regulatory interest.

Obviously if they are to be operated by an Irish based subsidiary that would be a further step, but it is not clear that this is to be the case.
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Old 27th Apr 2013, 16:17
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but it is not clear that this is to be the case.
Yes it is, they are leasing them from IFLC, they generally register their leased aircraft in Ireland.

Nothing to see here, there is no story, just chicken feed for the gutterpress
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Old 27th Apr 2013, 23:58
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There are a range of reasons for overseas registration.

All the Boeing/Airbus aircraft in Russia registered overseas (Bermuda is a favourite, but Ireland also) are due to an import tax on non-Russian manufactured aircraft, which this avoids.

In Italy, and some other places, bankruptcy laws can leave a big liability to leasing companies if the airline goes bust.

Elsewhere just the legal logistics of getting aircraft out of the country again if the lease is not paid on a domestically-registered aircraft causes it.

Some countries have regulatory issues with non-national pilots and/or licences which it overcomes.
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Old 28th Apr 2013, 00:34
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The Isle of Man is a increasingly popular registrar for business jets, as is Bermuda.

Back in the old days of Guinness Peat, Irish registered aircraft would be found all over the world.

Western socialist nanny states will soon have their aviation sectors in the same condition as their car industries. Overburdened with regulations, unproductive workers, high cost and unable to compete with Asia.

Compare the likes of KLM, Air France, Iberia, Alitalia with Emirates, Singapore Airlines, Qatar.
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Old 28th Apr 2013, 20:08
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There are none so blind as cannot see.
For those of you who reckon there is "nothing to see" here or that this issue is a mere administrative nicety, I suggest you look at the Merchant Navy( from whence the practice and nomenclature originate )
In the 60's the world fleet was dominated by British and Northern European flagged ships . I'll use the British fleet as an example but you could substitute any of the traditional maritime states.
Ship's officers were well respected in society and a Captain or Chief Engineer was a position of prestige and reward.
Cunard,P & O, Union Castle, Blue Flue, Bank Line,Blue Star,Furness Withy, Port Line, Clan Line, Ben Line, and a multitude of others were household names and dominated world trade.
All the senior officers were British , as were most of the ratings and lower ranks.
The passenger trades were crewed by british stewards and catering staff from top to bottom with a few exceptions.
Companies had in house indentured cadetship schemes to ensure a supply of highly trained and qualified personnel rising up the ranks.
Fast forward 50 odd years.
Virtually no international trade is carried on British ships and a British Captain or senior officer is rarer than hen's teeth. There are no british ratings to be found even on the home trades. Your ferry from Dover to Calais is likely to be registered in the Bahamas,have a Polish skipper and Filipino crew. The Red Ensign has re-emerged after virtual extinction but is itself now a "Flag of convenience" . That huge container ship you saw sailing up the Solent with the London registration is unlikely to have a single Brit or commonwealth person on board. Supply boats based in Aberdeen are manned by Eastern European officers and third world crews. They trade exclusively within UK waters.
Fast forward 20 odd years.
Heathrow is lined with wide body jets on Irish,Icelandic,Lithuanian, Panamanian or Timbuctoo registrations. The flight crew are from Eastern Europe or the Far East. The cabin crew are Filipinos on three year contracts who stay in a large dorm in Slough, work to Panamanian FTL's and get paid 30% what a british hostie would accept. They operate LHR-JFK-LHR then have a day off. The Brit hostie is extinct.
Your holiday jet to the sun will be similarly operated but from a point even further down the food chain.
The regionals will be crewed by P2F Ukrainians trying to get onto the job ladder or rejects from the "New Majors"
A few older Brit management pilots will hold key posts in offices and provide cast iron procedures and processes for their cheap third world crews to follow. They themselves will eventually die off as nobody will be rising through the ranks to replace them.
It's coming folks!
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Old 28th Apr 2013, 20:22
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The Brit hostie is extinct.

Yes, she probably died of old age. If a filipina is good enough for Cathay Pacific, she's good enough for me.
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Old 28th Apr 2013, 20:47
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And how about the P2F skipper on your holiday flight. Is he OK with you too?
After all he'll be good enough for Lion O'leary Jet.
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Old 28th Apr 2013, 20:47
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Strange, then, that the last passenger ship to founder was an Italian ship, registered in Italy and crewed by Italian officers.
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Old 28th Apr 2013, 21:35
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No, hundreds of ships have foundered since the Costa Concordia,including several passenger ships.
It's just that the deaths of lots of foreign brown poor people in far away countries is not really considered newsworthy in the west. ( how many have heard of the Dona Paz ?- google it )
Now lots of prosperous Europeans just like us and a dodgy Italian skipper , thats a story!

Last edited by HOMER SIMPSONS LOVECHILD; 28th Apr 2013 at 21:39.
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Old 29th Apr 2013, 08:10
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HSL you missed my point but no worries.
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Old 30th Apr 2013, 04:25
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As HOMERS LOVE CHILD said "none so blind as those that will not see", anyone who thinks of ILFC ownership being the driving force in seeking Irish "jurisdiction" is deluding themselves.


Air authorities powerless over Norwegian move / News / The Foreigner ? Norwegian News in English.
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Old 7th May 2013, 21:26
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It's a pity this thread has mostly dissolved into pointless bickering.... because this is a massive issue which should concern anyone with a stake in aviation - even as a passenger. Aviation is only safe because of the professional attitudes of those employed in it and the oversight of national authorities. Flag of convenience operations diminish both of these.

Last edited by ShotOne; 7th May 2013 at 21:27.
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Old 8th May 2013, 01:23
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The remarks regarding Merchant Navy are outdated.
Insurance companies have taken action in the meantime and National Legistlations in various EU countries have made it easier and more lucrative to rebase ships in a EU country.
Ships do have EU deck and Engine officers, moreover, there is NO unemployment once graduated, you are very much needed. salaries have gone up a fair bit too.
Insurance companies require a certain percentage of Western well educated Officers onboard.
Shipping is our sister profession, we should work together, as Navigational Officers to make sure our lives and profession is regarded with esteem.
Shame that in Aviation, the Insurance companies are not yest seeing the light regarding Pay to fly.
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Old 8th May 2013, 12:18
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@Homer

It's coming folks!
Isn't this already here? UK and Irish low cost airlines operating in Europe, undercutting locally based airlines with P4T contract pilots and Eastern European P4T cabin crew?

Oh wait...they're from one of those English speaking islands in the Atlantic teaching those lazy, unionized, socialist main land Europeans a lesson, so then it must be okay, right?
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Old 8th May 2013, 12:54
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UK & Irish low cost airlines operating in Europe, undercutting locally based airlines

Funny isn't it? The continentals are the strongest supporters of a federal Europe with the same rules and rights for everyone across the union.

When someone uses those rights to fly anywhere in the EU it's suddenly unfair. No-one needs high-cost carriers. Their time is up.
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Old 8th May 2013, 13:24
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@ Tof

You obviously don't see that that what's coming, is already there. The UK or Irish flag is very convenient in continental EU, but now it's our fault, right?

Many people in the EU have never neither directly voted for any of those people in Brussels or Strasbourg nor for the laws that they crunch out, if you need a reminder then have a look on Youtube for Nigel Farage videos.

Actually it's quite similar to what has happened in the UK construction industry and how many were driven out of business by Eastern Europeans willing to work for cash in hand undercutting the British carpenters/builders. But please, don't let that stop you from flaming the EU.

One votes for politicians that end up stabbing you in the back, it's universal, not something uniquely reserved for the EU(SSR)!

When someone uses those rights to fly anywhere in the EU it's suddenly unfair. No-one needs high-cost carriers. Their time is up.
When you get a little bit older you might understand one day how the world works.
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Old 8th May 2013, 17:56
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Ah Now Ted

No such think as a flag of convenience in relation to aviation and claims that such exist are nonsense. Every country has a right to inspect planes using their territory and attempts to claim that its other countries airline is the problem avoids looking at their own industry.

Death rate of passnegers among LCCs is pretty much no existent where as Legacys over same period seems to be quite significantly higher.
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Old 8th May 2013, 20:41
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Surely the real issue is that the LoCo's have found a whole new market? As far as I'm aware, the established European LoCo's have never had a flying-related passenger fatality? That's a business model that works at every level.

Passengers happy enough to rebook. Company owners happy enough to stay with the business. Employees not sufficiently unhappy that they leave in numbers that disrupt the business.

The rest is simply noise.
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Old 8th May 2013, 20:48
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Surely the real issue is that the LoCo's have found a whole new market? As far as I'm aware, the established European LoCo's have never had a flying-related passenger fatality? That's a business model that works at every level.

Passengers happy enough to rebook. Company owners happy enough to stay with the business. Employees not sufficiently unhappy that they leave in numbers that disrupt the business.

The rest is simply noise.
Course it is but people from legacy carriers want to get impression out there that it is LCCs that are unsafe while covering up their own often questionable standards.

Easier to demonise someone else.
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Old 12th May 2013, 19:20
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Location of Aircraft Register

Remember that there is an important distinction between the jurisdiction of the legal owner of the aircraft, the place of registration of the aircraft and the jurisdiction of the operator and their air operator certificate.

The jurisdiction of the legal owner of the aircraft is often (but not always)dictated by where the aircraft will be registered (e.g. FAA N-reg aircraft generally need to be owned by US-incorporated companies, financiers or trustees, but there are ways around this).

The place of the register (for airliners, at least) is dictated frequently by the ease of registration (and enforcement) of the aircraft mortgage in that jurisdiction by a financier. Ireland is particularly popular given that it is a signatory to the Cape Town Convention and it is very easy to register and if necessary enforce a mortgage over the aircraft and retake possession. I would shudder to think how painful it would be to enforce a mortgage over an aircraft registered in Russia (for example). It’s actually messy to enforce an aircraft mortgage in many European jurisdictions (Italy is just one example), hence why Ireland is such an attractive place to register an aircraft.

Some US banks often feel more comfortable registering the aircraft in the US and taking a US-law mortgage, hence why you sometimes seem random foreign airlines with N-reg aircraft (often the case for aircraft operating in South American or the Mid-East)

(in the past there was also the “double-dip” and “triple-dip” tax-driven leasing structures that would involve ownership and/or registration and/or lessee or lessor in Germany and Japan, but these are pretty hard to achieve these days so aren’t a big factor anymore)

The jurisdiction of the operator is a whole different kettle of fish to where the aircraft isregistered, which is what I think people are most worked-up about.

The lien over an aircraft for unpaid Eurocontrol ATC and nav charges which a few people mentioned is levied on the aircraft regardless of where it is registered – whether the aircraft is registered within the EU or outside the EU makes no difference for Eurocontrol.

Flags of convenience for the shipping industry and the location of the register (and employment terms of those working on the ships) function differently to aircraft, so the comparisons aren’t quite the same.
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