Aircraft as an asset class

Aircraft have been a well-recognised asset class in Japan for some time and are an area of particular interest when considering alternative assets for investment. As the number of aircraft models manufactured is small and the pool of users very large, it makes the sale and leasing of aircraft much easier than say ships or real estate, where each asset is a little more unique.

The economic life of an aircraft, especially newly built ones, tends to be much longer particularly from a tax perspective. They can often be depreciated fully against their purchase price, unlike real estate, where the land often contributes to a higher proportion of the investment than the building or structure. Economically owners can also still make use of older aircrafts to extract more value. Few major airlines own the majority of their fleet, opting instead to lease models to help accommodate increases in scheduling which means there will always be an industry demand for aircraft. Adding all of this to the prestige of owning an aircraft it is no wonder that the leasing business has flourished in Japan.

Having been a very important source of capital for the industry for a long time, several well established Japanese leasing companies have turned to Ireland as their base, as it’s considered a centre of excellence when it comes to aircraft leasing. Over the past 40 years Ireland has grown from a niche market to a multi-billion euro industry.  Half of all aviation leasing companies operating in the global aviation leasing sector is based there, including 14 of the top 15 leasing companies.  That means that more than 4,000 aircraft, valued at $120 billion, are leased out of Ireland making it one of the biggest hubs in the world for this activity.

As aircraft fly globally the business is inherently international and, language wise, English based.

One of the advantages of being part of a wider Group is that we are able to call upon the expertise of our colleagues from across our network of 14 offices, whilst being able to assist you in both Japanese and English. With this in mind we are now able to provide access to aircraft leasing from our Tokyo office working with our Irish colleagues, who bring with them more than 25 years of experience working within this sector.

If you are looking to set up an aircraft structure then please do talk to us at Moore. We have fund specialists within First Names Group who will be able to create a structure that is best suited to the investors’ investment objectives and your organisation’s requirements. We can also provide bespoke fiduciary, corporate administration services and be responsible for the day-to-day management of operations in the aviation sector. We also have an office in Singapore and can help set up Special Purpose Vehicles (SPV) and or structures to fit your business requirements.

To find out more and speak to one of our specialists

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