BreezyIAH
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Posts: 105
Joined: Sat Mar 11, 2017 7:45 pm

Why does Avianca have US registration?

Thu May 10, 2018 12:43 am

I know I'm probably late to this but why do all Avianca aircraft have the "N" registration?
 
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Wynnster8
Posts: 93
Joined: Fri Jul 22, 2016 8:10 pm

Re: Why does Avianca have US registration?

Thu May 10, 2018 1:37 am

BreezyIAH wrote:
I know I'm probably late to this but why do all Avianca aircraft have the "N" registration?


Refer to: viewtopic.php?t=538979

I will summarize it in 2 Words: Tax Purposes.
Favorite plane is 757-200 Favorite airport is Singapore Favorite route is SYD-JNB
 
FermiParadox
Posts: 83
Joined: Fri Jul 21, 2017 3:05 pm

Re: Why does Avianca have US registration?

Thu May 10, 2018 2:15 pm

Does this mean that all Avianca pilots must hold FAA licenses?
 
FCOTSTW
Posts: 180
Joined: Fri Mar 23, 2018 8:14 pm

Re: Why does Avianca have US registration?

Thu May 10, 2018 4:23 pm

It could be for two reasons:

1. The lessor company (a third party) is headquartered in the U.S. or any of its territories and, by leasing contract, might require aircrafts to be registered with a specific country (example: almost all Alitalia' s aircrafts have an Irish "EI" registration) in order to keep local control over the leased aircrafts. By following this practice, in case of repossession due to breach of contract the proceedings could be faster and easier;
2. In case of ownership, as wynnster8 mentioned Avianca could have opened a fully-controlled, U.S. subsidiary, which would hold U.S. ownership of the aircrafts and would lease them to the airline, with substantial tax savings.
 
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FA9295
Posts: 1770
Joined: Thu Feb 25, 2016 7:44 pm

Re: Why does Avianca have US registration?

Thu May 10, 2018 4:24 pm

AeroMexico also has a lot of US registered aircraft:

    N377AR
    N825AM
    N875AM
    N950AM
    N957AM

...are the ones that I could find, but I'm sure that there's a lot more of them in their fleet...
 
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litz
Posts: 2348
Joined: Wed Dec 24, 2003 6:01 am

Re: Why does Avianca have US registration?

Thu May 10, 2018 4:52 pm

FCOTSTW wrote:
It could be for two reasons:

1. The lessor company (a third party) is headquartered in the U.S. or any of its territories and, by leasing contract, might require aircrafts to be registered with a specific country (example: almost all Alitalia' s aircrafts have an Irish "EI" registration) in order to keep local control over the leased aircrafts. By following this practice, in case of repossession due to breach of contract the proceedings could be faster and easier;
2. In case of ownership, as wynnster8 mentioned Avianca could have opened a fully-controlled, U.S. subsidiary, which would hold U.S. ownership of the aircrafts and would lease them to the airline, with substantial tax savings.


And regarding 1. above, remember that the world's largest "airline" is GE Capital Finance ... they own lots of airplanes leased to a lot of airlines all over the world.
 
trent772
Posts: 191
Joined: Wed Oct 10, 2012 10:08 pm

Re: Why does Avianca have US registration?

Thu May 10, 2018 5:51 pm

FermiParadox wrote:
Does this mean that all Avianca pilots must hold FAA licenses?


Av pilots hold a special purpose pilot authorization document issued by the FAA, it’s not a licence, what this does is allows them to fly Us registered aircraft for Passenger operations.
You can find out more searching for CFR part 61, 61.77
 
strfyr51
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Joined: Tue Apr 10, 2012 5:04 pm

Re: Why does Avianca have US registration?

Thu May 10, 2018 6:00 pm

Many times the Airplane's owners might require US registration to make the Airplane more saleable at the end of the lease. Also? They may be using a USA major's Maintenance program.
 
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XAM2175
Posts: 1156
Joined: Thu Oct 30, 2014 2:25 pm

Re: Why does Avianca have US registration?

Thu May 10, 2018 6:25 pm

Wynnster8 wrote:
I will summarize it in 2 Words: Tax Purposes.


Expanding on which - witness Aeroflot registering all their US- or EU-made aircraft in Bermuda (VP-Bxx and VQ-Bxx) to avoid Russia's import taxes on foreign-made aircraft.

litz wrote:
And regarding 1. above, remember that the world's largest "airline" is GE Capital Finance ... they own lots of airplanes leased to a lot of airlines all over the world.


Worth noting though that as a rule, leased aircraft are placed on the register of the country in which their operator is based, for simplicity as much as anything else. Otherwise you'd see all manner of weird things like Qantas A330s registered in the US and Ireland and B737s registered in Japan . In some cases though, like this, keeping the registration in the lessor's country makes certain financial procedures easier and overcome certification and maintenance oversight issues.
 
mabadia71
Posts: 62
Joined: Thu Nov 06, 2008 12:02 am

Re: Why does Avianca have US registration?

Thu May 10, 2018 7:32 pm

I have also heard the insurance premiums are much higher for Colombia, Costa Rica or El Salvador registered aircrafts.
mabadia71
 
Planesmart
Posts: 2891
Joined: Sun Dec 05, 2004 3:18 am

Re: Why does Avianca have US registration?

Thu May 10, 2018 11:13 pm

Wynnster8 wrote:
BreezyIAH wrote:
I know I'm probably late to this but why do all Avianca aircraft have the "N" registration?


Refer to: viewtopic.php?t=538979

I will summarize it in 2 Words: Tax Purposes.

The reference topic from about 6 years ago - jigcarcier and FoxBravo comments are accurate.

Tax is the primary motivation, followed by asset management.
 
Planesmart
Posts: 2891
Joined: Sun Dec 05, 2004 3:18 am

Re: Why does Avianca have US registration?

Thu May 10, 2018 11:23 pm

mabadia71 wrote:
I have also heard the insurance premiums are much higher for Colombia, Costa Rica or El Salvador registered aircrafts.

Commercial aviation insurers profile clients using an array of data, including where the aircraft fly, and in some cases, how long they stay on the ground in high risk countries. That's why some airlines operate sub-fleets, usually their oldest, and owned rather than leased, to countries like Afghanistan.

For countries where the rule of law has political bias, if the aircraft concerned rarely if ever ventures outside the borders, re-possession in the event of default, irrespective of registration, is hypothetical.

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