Ire­land’s pri­vate and com­pany air­craft own­ers

There are hun­dreds of pri­vately owned recre­ational air­craft on the regis­ter

The Irish Times - Weekend Review - - NEWS REVIEW - Gerry Byrne

This week, as part of the Par­adise Pa­pers in­ves­ti­ga­tion, it emerged that the Ir­ish busi­ness­men De­nis O’Brien, Jerry Ken­nelly and Ray Nolan avoided pay­ing VAT by buy­ing and reg­is­ter­ing their cor­po­rate air­craft in the Isle of Man.

Al­most 1,000 air­craft bought for busi­ness use have been im­ported into the Euro­pean Union over the past 10 years through the Isle of Man, which has one of the world’s largest off­shore pri­vate-air­craft reg­istries.

Struc­tur­ing avi­a­tion deals to re­duce one’s tax bill is not un­usual – and it is quite le­gal. When Boe­ing hands over a new air­liner it of­ten does so on a trip out over the Pa­cific, es­pe­cially if the buyer is a high credit risk, and can qual­ify for ex­port- im­port bank loans sub­sidised by US tax­pay­ers. Thou­sands of air­craft own­ers get a re­duced tax bill by reg­is­ter­ing in the Amer­i­can state of Delaware. And 860 com­mer­cial air­lin­ers and cargo air­craft are reg­is­tered in Ire­land, even though many never fly near the place.

In fact the Ir­ish econ­omy ben­e­fits from of­fer­ing tax deals to per­suade air­craft own­ers to base them­selves here, which ex­plains the hun­dreds of large air­lin­ers reg­is­tered with the Ir­ish Avi­a­tion Au­thor­ity. Ire­land is to avi­a­tion what flag-of-con­ve­nience coun­tries such as Ber­muda, Liberia and Panama are to ship­ping.

Ire­land now com­mands a fifth of the in­ter­na­tional air­liner-leas­ing mar­ket, giv­ing Ir­ish lease com­pa­nies an an­nual in­come of more than ¤10 bil­lion.

Gulf­stream VI

Gen­eral avi­a­tion – which is to say that not in­volv­ing air­lin­ers – are a dif­fer­ent mar­ket. De­nis O’Brien’s Gulf­stream VI jet has a ¤60 mil­lion price tag, is ca­pa­ble of reach­ing the west coast of the United States in a sin­gle trip and out­per­forms most other com­pany jets.

Yet even the wealth­i­est own­ers sel­dom re­serve their air­craft ex­clu­sively for their own use. Most place their planes on the books of com­pa­nies such as WestAir Avi­a­tion, at Shan­non Air­port, which char­ter them to other busi­ness­men.

A Gulf­stream VI could eas­ily earn up­wards of ¤25,000 a day – and de­mand is high. Char­ter­ing is a way to re­duce the con­sid­er­able cost of own­er­ship, even for the most wealthy. Char­ter com­pa­nies also man­age rich peo­ple’s jets, main­tain­ing them and pro­vid­ing pi­lots.

But very few cor­po­rate air­craft are on the Ir­ish regis­ter, and the tax breaks for air­lin­ers don’t trans­late into too many ben­e­fits for lo­cal Ir­ish air­craft own­ers.

Larry Good­man’s Anglo Beef Pro­ces­sors Ire­land has a com­pany air­craft, a Euro­copter Dauphin that is now 10 years old. A new one of these he­li­copters would cost about ¤8 mil­lion.

Dawn Meats’ com­pany air­craft is a rel­a­tively fru­gal Cessna 441 Con­quest twin tur­bo­prop, built in 1980 and prob­a­bly worth less than ¤1 mil­lion.

Sev­eral hun­dred pri­vately owned air­craft on the Ir­ish regis­ter are used al­most ex­clu­sively for re­cre­ation. The eight ex­ec­u­tive jets are al­most ex­clu­sively owned by char­ter com­pa­nies, and 440 other air­craft – mostly pro­pel­ler planes, but also in­clud­ing three hot air bal­loons and six glid­ers – are owned by fly­ing schools, fly­ing clubs and syn­di­cates, where a group of peo­ple share a small air­craft.

The air­craft pre­dom­i­nantly owned by sin- gle in­di­vid­u­als are mostly rather el­derly ma­chines. Per­haps the old­est is an Avro Cadet Bi­plane from 1935. It is owned by John O’Lough­lin of Castle­bridge, Co Wex­ford.

The re­tired Aer Lin­gus pi­lot Neil Johnston owns a Piper Cub from 1944, ex­am­ples of which can be found for sale for ¤44,000, al­though he warns that, while many peo­ple have the cash to buy a small air­craft, very few have the money to op­er­ate it. His air­craft was grounded for two months this sum­mer for some ex­pen­sive main­te­nance. “There is rarely such as thing as the glam­orous world of air­craft own­er­ship,” he says.

Fly­ing en­thu­si­asts of­ten save cash by build­ing their own air­craft from kits, and there are 43 home-built air­craft on the Ir­ish regis­ter, in­clud­ing the only Ir­ish ex­am­ple of a Ru­tan Long-EZ, the type of plane in which the singer-song­writer John Den­ver died over Mon­terey Bay, in Cal­i­for­nia, in 1997. The Ir­ish Long- EZ is owned by Fia and Carina O’Caoimh of Kil­macanogue, Co Wick­low.

The smaller the air­craft the less ex­pen­sive it is to op­er­ate, and that is one of the fac­tors lead­ing to the growth in num­bers of mi­cro­light air­craft – which is to say planes that weigh less than 450kg. There are now 154 mi­cro­lights on the Ir­ish regis­ter.

‘‘ The Ir­ish econ­omy ben­e­fits from of­fer­ing tax deals to per­suade air­craft own­ers to base them­selves here

Gulf­stream: De­nis O’Brien’s ¤60 mil­lion cor­po­rate jet

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