“FAULTY planes” are being allowed to fly due to airlines exploiting tax and employment law loopholes abroad, a damning new report has found.

A growing number of airlines have adopted the dodge of flying planes under flags of convenience — registering their planes in countries they rarely land in to drive down costs.

But aviation union Prospect, which represents more than 5,000 workers, yesterday said the “liberalisation” of the sector has put public safety at risk and called for a ban on “flagging out” planes.

The union is calling for the Civil Aviation Authority to be broken up, arguing that its role in the economic regulation of the sector compromises its duty to deliver safety for the public and workers.

Prospect national secretary Steve Jary said: “There is growing evidence that the CAA is struggling to reconcile these responsibilities, with the result that its historical focus on safety is becoming blurred.”

Prospect’s report, titled Towards a Sustainable Aviation Industry for the UK, charts the deregulation of the skies, noting the marked drop in the cost of flying for passengers.

But it says the change only provided a “short-term” economic boost to the sector.

“We believe the pursuit of further, probably marginal, gains in supply and demand has put other strategic objectives — like safety and the environment — at risk,” the document warns.

The union argues that deadly crashes could have been avoided if airlines were not zealously pursuing aviation loopholes.

A Flightline SL-operated aircraft which crash-landed in Cork, Ireland, in 2011 after a trip from Belfast had a flight certificate issued in Spain, where it was owned.

The Irish Air Accident Investigation Unit’s report found: “The IAA and UK CAA … relied on the oversight of Spain to ensure compliance in regulatory matters … such oversight was of limited scope and low effectiveness.”

Prospect’s report argues: “There are significant pressures to allow potentially faulty planes to fly when turnaround schedules are very tight and maintenance is not possible.”

It raps operators for taking “regulatory shopping-trips” to pursue “cheap registration fees, low or no taxes and the freedom to employ cheap labour” and attacks Ryanair for employing staff via small agencies abroad.

“Regulators who are responsible for the market as well as safety increasingly think that they can only attract business by adopting a ‘light touch’,” it warns.