Ireland's Leasing Edge: Why Dublin Dominates Aviation Finance

Dublin's fiscal landscape and robust ecosystem make it the global hub for aircraft leasing.

How it works

Ireland's dominance in aircraft leasing stems from a confluence of strategic advantages. At its core is the 12.5% corporate tax rate, highly attractive for profit-generating leasing entities. This is complemented by an extensive network of double-tax treaties, mitigating withholding tax burdens for lessors operating internationally. The Section 110 Special Purpose Vehicle (SPV) framework is another cornerstone, allowing for tax-efficient securitisation and financing of aircraft portfolios. These SPVs, often structured as qualifying companies, facilitate the acquisition and leasing of aircraft, with income streams typically structured to minimise tax leakage through deductible finance costs.

Furthermore, Ireland benefits from its common law legal system, offering predictability and familiarity for international investors and financiers. Its EU membership provides passporting rights, simplifying cross-border operations within the bloc. The country's skilled workforce, comprising legal, financial, and aviation professionals, provides a sophisticated support infrastructure, further solidifying Dublin's appeal.

Typical terms in 2026

While specific terms vary significantly based on asset type, lessee credit, and market conditions, general trends for new aircraft leases in 2026 reflect a tightening market for specific financing structures. Leveraged leases remain common, with LTVs often in the 60-70% range for modern, liquid assets. Tenors typically align with the expected economic life of the aircraft or the duration of the initial lease, commonly 8-12 years for new narrow-bodies.

| Metric | New Narrow-body (A320/B737) | New Wide-body (A350/B787) |

| :--------------- | :-------------------------- | :----------------------- |

| LTV Range | 65-75% | 60-70% |

| Tenor (Years)| 8-12 | 10-15 |

| Rate Range | SOFR/EURIBOR + 1.8-2.5% | SOFR/EURIBOR + 2.0-3.0% |

| Residual % | 40-50% (after 10 yrs) | 35-45% (after 10 yrs) |

Depreciation schedules typically follow a straight-line method over 15-25 years, aligning with industry standards. Debt service coverage ratios (DSCR) are usually mandated at 1.2x to 1.5x, offering a comfortable buffer for lenders.

Who it suits

Ireland's leasing ecosystem primarily suits established aircraft lessors, airlines seeking operating lease solutions, and institutional investors looking for stable, asset-backed returns. Its robust legal and fiscal framework is particularly advantageous for large-scale portfolio transactions, securitised deals, and cross-border leasing structures. Lessors benefit from tax efficiencies and a deep pool of experienced talent, while airlines gain access to flexible financing without requiring significant capital expenditure. Investors find comfort in the legal certainty and the strong track record of Irish-domiciled leasing entities.

Pitfalls to avoid

Despite its advantages, navigating the Irish leasing landscape requires careful attention to detail. Common pitfalls include failing to adequately structure SPVs to fully leverage Section 110 benefits, underestimating the complexity of international tax compliance (even with treaties), and neglecting the intricacies of Irish legal documentation. While lessors benefit from reduced corporate tax, a solid understanding of anti-avoidance provisions and transfer pricing rules is crucial. Furthermore, the operational demands of managing a global portfolio from a single jurisdiction necessitate robust internal controls and experienced personnel. Early engagement with specialist legal and tax advisors is paramount.

How Mega Aviation helps

Mega Aviation, as a leading advisory firm, assists clients in optimising their aircraft leasing strategies within the Irish framework. We provide comprehensive guidance on deal structuring, market access, and regulatory navigation. Crucially, Mega Aviation introduces clients to a network of vetted lenders and lessors globally, facilitating capital deployment and lease placements. It is important to note that Mega Aviation operates strictly as an advisory service and does not act as a regulated financial adviser or directly arrange loans; rather, we bridge the gap between discerning clients and established financial institutions.