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flags of convenience

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flags of convenience

Old 25th Apr 2013, 04:20
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flags of convenience

Norwegian, currently the third largest loco in Europe, is considering to register it's new Dreamliners in Ireland, "to become more competitive" (which I assume means employing "offshore" crew, at lower salaries and less attractive conditions, avoiding Norwegian labor law).

There is nothing wrong with Ireland, they have professional airlines, and a professional registry...yet Norwegian doesn't have any connection with Ireland. Norway is a high-cost country, with relatively strict labor laws (a socialist nanny state if you want), and this seems to be a purely cost-based decision, just like Microsoft and numerous other companies (including airlines) who already employ a large amount of call centers agents serving other countries in Ireland.

Ireland already attracted some Spanish, Italian, Swedish and UK Aircraft...and Air Mongolia, Russian airliners from KD Avia, TransAero, AirUnion (KrasAir) are on the list, as far as I know.

Flags of convenience have been used for merchant ships since the 1950ies, where crews on international voyages are largely recruited from (very) low cost countries, and offshore registries - often for tax and/or licensing issues, eg - are not uncommon for business jets. There is a mushrooming cottage industry of micro-states, some of which don't even have airports, like San Marino - which offer "competitive" aircraft registration, looking to expand into the commercial aviation registry "business". So far shopping around for "better" conditions hasn't been very common for larger, scheduled airlines (maybe except the Aeroflot A320s). Is this the beginning of a new development? In 20 years, will we see more crews working at "offshore" conditions, based out of Asian cities, training funded through bonded slavery contracts and/or PTF schemes, flying in Europe and the US, in aircraft registered in places Bermuda, San Marino, Liberia and the Isle of Man? What could be next, operators shopping around for AOC's to circumvent safety blacklists?

Last edited by deptrai; 25th Apr 2013 at 04:51.
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Old 25th Apr 2013, 04:55
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I think you'd find many Irish registered aircraft are Irish owned. There are, stemming from even before Ireland's days as "Celtic Tiger" hub of international finance, several strong aircraft leasing business based there. Often these companies are reluctant to have their assets registered in client countries because 1) that puts their continuing airworthiness under the scrutiny of a local regulator and 2) it could make repossession difficult in the even the deal turns sour. Kingfisher, anyone?
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Old 25th Apr 2013, 05:30
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that puts their continuing airworthiness under the scrutiny of a local regulator
Any local regulator has the right to scrutinise the airworthiness of aircraft arriving in it's state.
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Old 25th Apr 2013, 05:31
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Deptrai...i've read your article with much attention, but respectfully i humble think you are a lil' ''outdated'' regarding examples given.

There is no such airline named "Air Mongolia", and both KD Avia and Union(Kras) stopped flying many years ago.

Regarding the convenience Reg. Countries, AFAIK there is only one or 2 bizjets registered in San Marino, and about Liberia since the good old pair of L1011 freighters on the new prefix=A8 (after historic EL), not a single plane got any Liberian registration....these L1011 refers to the last flights made around big Asian Tsunami some years ago...iirc, just my 2 cents.

Last edited by JanetFlight; 25th Apr 2013 at 05:33.
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Old 25th Apr 2013, 06:13
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JanetFlight - for the sake of pure sensationalism I did a quick google search which yielded "Air Mongolia" (could be Aero Mongolia) and a few other which supposedly were registered in Ireland, yet as you point out may no longer operate under the same name. Exotic names in aviation isn't my hobby, forgive me for any mistakes My main point was Norwegian though, and I'm wondering if we will see more bigger operators considering such moves.

Last edited by deptrai; 25th Apr 2013 at 06:13.
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Old 25th Apr 2013, 06:25
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I'm not a lawyer, but I dont think you can just 'register a plane' in a country. You have to register a company first.

To benefit from European route rights (i.e. can fly between any two airports in the EU) an operator has to be majority owned by EU citizens.
.

Last edited by toffeez; 25th Apr 2013 at 12:41.
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Old 25th Apr 2013, 07:06
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Originally Posted by deptrai
Norwegian, currently the third largest loco in Europe, is considering to register it's new Dreamliners in Ireland, "to become more competitive" (which I assume means employing "offshore" crew, at lower salaries and less attractive conditions, avoiding Norwegian labor law).
The entire recent Russian airliner fleet and more than 50% of the Italian one are registered overseas, along with many others. Ireland is a principal place for this but by no means the only one. However in the cases I describe the crews still come from the native country, not significantly from overseas. Its done for different, financial back-office reasons, mainly to do with asset protection by the leasing companies.
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Old 25th Apr 2013, 09:50
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There are several reasons for Irish registry. Originally the registry was simplified when Guinness Peat had its leasing business there. Then during the 80's-90's Ireland wanted to attract more business that would domicile there while operating/owned in Europe, or those offshore companies that wanted a European presence, all part of the Celtic Tiger (let's not talk about how the tiger drowned...) growth strategy.

Ireland has good double taxation treaties within Europe, secures the ownership of the leasing company, IFLC uses it a lot too for that reason. Furthermore Ireland allows foreign, think offshore companies, to register anything from Aircraft to financial funds.

So don't think that Norwegian would just use the Irish register to circumvent local employment laws, it is purely done as it is the most favourable and affordable registry in Europe.
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Old 25th Apr 2013, 09:54
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And from personal experience "rules" are flexible, optional and the blind eye is widely, if not universally employed. The IAA is a poodle with rubber teeth.
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Old 25th Apr 2013, 10:01
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I am not closely familiar with bankruptcy/possession law in Norway, but to understand why they would choose Ireland, you first need to investigate Norway.

Italy is a prime example, the leasing company is responsible for the bills accrued by its aircraft there so no leasing company would register aircraft in Italy just in case the airline goes bust, they would struggle getting their airframes back and they would be liable for the bills accrued by that aircraft.

So if you want the real reason why Norwegian/the leasing company chooses Ireland you need to retain yourself an accountant and a lawyer and have them write a brief for you describing the differences and advantages of each.

If you are just posting here to sh!t stir, then by all means go ahead and I will step aside.
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Old 25th Apr 2013, 10:01
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Originally Posted by cldrvr
So don't think that Norwegian would just use the Irish register to circumvent local employment laws, it is purely done as it is the most favourable and affordable registry in Europe.
O'Leary of the Fjords have quite clearly stated that if they are not allowed to use cheap asian labour on their long-haul fleet, which current Norwegian law does not allow, they will not register the aircraft in Norway.
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Old 25th Apr 2013, 10:28
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O'Leary of the Fjords have quite clearly stated that if they are not allowed
to use cheap asian labour on their long-haul fleet, which current Norwegian law does not allow, they will not register the aircraft in Norway
do you have a reference/quote for that one or are you just making stuff up as you go along.
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Old 25th Apr 2013, 10:50
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Were you born rude or just raised that way?

For your education:

Norwegian får ikke sin vilje, antyder utflagging -

Aftenposten Truer med utflaggingover fagforeningskravene - Næringsliv - E24

etc...
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Old 25th Apr 2013, 12:25
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What a load of ill informed garbage with a spurious title.

Registry of aircraft and its lease owners has SFA to do with how or where an airline operates.

Spanair operating from Barcelona had aircraft leased from Irish leasing companies, Sky Europe likewise, Malev and many other airlines across Europe had, have and will continue to have in the future.

A claim that somehow because the owners of the aircraft have registered their asset in a country before leasing to a company impacts on how the airline operates is laughable.

Where the airline is registered is where the AOC is applicable and has no bearing on the aircraft used.

GPA was one of the forerunners of Aircraft Leasing and following on from this an industry developed in Ireland specialising in this, helped by Irish Govt economic policy and low taxation.

I am not aware that because an aircraft is registered in one country it automatically prevents a 3rd country from inspecting or having anything to do with how the aircraft is operated. It has never been the case yet nor ever likely to be the case.

This thread belongs in the bin.
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Old 25th Apr 2013, 12:36
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Were you born rude or just raised that way?
I'd rather be rude than live in that fantasy world of yours.

Now let's get back to subject.

Find a reference, and not from the gutter press, stating that Norwegian is going to move its AOC, company, headquarters and all personnel to Ireland because that is what it would take to be covered under Irish regs.

Just because the lessor, in this case ILFC is going to register its aircraft in Ireland, and Norwegian may well follow suit for some of its own aircraft, has bugger all to do with the operating company.
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Old 25th Apr 2013, 13:16
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Moving the company and headquarters may be easier than you´d think, since it´s a separate company, Norwegian Long Haul A/S. Do not underestimate Björn Kjos, the CEO. He´s been doing remarkably well so far.
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Old 25th Apr 2013, 13:22
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Norwegian vil flagge ut til Irland - DN.no
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Old 25th Apr 2013, 13:24
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Norwegian airline mulls Irish registries to cut costs - Yahoo! Singapore Finance
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Old 25th Apr 2013, 13:42
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Moving the company and headquarters may be easier than you´d think, since it´s a separate company, Norwegian Long Haul A/S. Do not underestimate Björn Kjos, the CEO. He´s been doing remarkably well so far.
Going by the posts here, entrepreneurs like that are not welcomed in Norway, he should just pick up sticks and move the whole lot to Ireland, they would welcome him with open arms.

He probably does not give a toss where he is based.

Last edited by cldrvr; 27th Apr 2013 at 16:18.
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Old 25th Apr 2013, 17:14
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So if you want the real reason why Norwegian/the leasing company chooses Ireland you need to retain yourself an accountant and a lawyer and have them write a brief for you describing the differences and advantages of each.
cldrvr first you claim to know the "real reason", and go on to uninformed ramblings and wild speculatioms about "leasing". you seem to be making this up yourself, without any sources at all, yet then you challenge other, clearly better informed people than you to post their sources:

do you have a reference/quote for that one or are you just making stuff up as you go along.
and finally you bring up Denmark (?), which has nothing to do with this topic (Hint: the company is called NORWEGIAN).

If you are just posting here to sh!t stir, then by all means go ahead and I will step aside.
The above taken into account, I think you're the one stirrring up **** in this thread. I'm glad you have enough insight to step aside. Now would be a good time.

Back on topic: I was merely wondering if this will be a trend. With further locos starting long haul operations, it's only a question of time before they come up with new creative cost cutting measures.

Last edited by deptrai; 25th Apr 2013 at 17:27.
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