Their planes may not have been the best, but that wasn't the real problem the Italian Air Force, and the rest of the Italian Military, had during the war.
Their forces were little more than a bad joke throughout the war for two simple reasons: they were very poorly trained, and the branches of the military seldom did joint operations, unlike most of the other combatants of the European theater. What that meant was that the average Italian soldier would be sent into combat with little sense of basic martial discipline, would barely know how to operate his own rifle, and was just bad at squad operations because squad operations themselves were barely existent. And they could forget about fire support from the equally undertrained Italian Navy and Air Force, or even support from Armor and Artillery units, who were also undertrained and rarely ever worked together.
As a result, Mussolini's Grand Army barely eeked out victory against a single opponent, the free state of Ethiopia, and failed every other offensive they ever undertook, including one against Southern France in 1940 (the French defenders were able to hold back the pathetic Italian forces for a week before the German capture of Paris forced them to surrender), one against the British in Egypt in late 1940 (which ended up requiring the Germans to bail them out since the British took 250,000 Italian soldiers prisoner in a humiliating defeat for the Italians), and Greece in 1941 (which the Germans also ended up bailing them out on since the Italians couldn't even handle the Greek defenses).
Equipment was never really an issue for the Italians, and if it was, the Germans probably would have stepped in and supplied the Italians with their own equipment, much like the US did with the British and Soviets. The real issue was that the Italians were horrifyingly incompetent as a military force, and that made them a pushover for basically anyone they fought against.