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08 April 2009
Emulating the success of its Shipping Register, which has grown into the eighth largest in the world and the second largest in Europe, Malta is committed to establishing itself as a leading jurisdiction for aircraft registration.
Plans were recently announced to reform the local regulatory framework and develop the registration of aircraft into a niche sector, with the potential of spearheading the creation of a cluster of aviation services. The government intends to present a new bill to Parliament by mid-2009 to:
The global economic crisis is leaving its mark on the aviation industry. Aircraft manufacturers are shedding jobs as passenger volumes decrease, airlines reconsider ambitious fleet expansion programmes and credit from banks becomes increasingly difficult to secure. The corporate use of business jets is under the spotlight as taxpayers and lawmakers question the wisdom of having government bailouts and Learjet expenses on the same cash-flow statements.
It is in circumstances such as these that boards of directors and high-net-worth individuals are seeking cost-saving opportunities. Not only will new aircraft owners, lessors, lessees and financiers be more careful about the fiscal and other costs involved in ownership, leasing, operation and financing structures, but existing operations are bound to reassess the pros and cons of the jurisdictions traditionally used for aircraft ownership and finance.
Owners, lessors and financing syndicates are shopping around for potential jurisdictions, taking into account:
Popular jurisdictions include Aruba, Bermuda, the Cayman Islands, the Bahamas, the Isle of Man and Ireland.
Despite not being well known in the international aviation industry, Malta offers good value for aircraft registration. The benefits include:
Malta is a member of the European Union and is fully compliant with the safety and supervisory standards of the European Aviation Safety Agency. It has a central geographical location, a strong legal framework and a pragmatic, but flexible, aviation authority. Although there has been an encouraging increase in interest in aircraft registrations in Malta and international lessors and finance parties have been setting up Maltese structures for their operations, the potential of the local aviation sector has so far remained mostly untapped.
With the reform underway, the local aviation sector will be better poised to take off and benefit numerous sectors of the Maltese economy. The local Malta College of Arts, Science and Technology-trained workforce employed directly in aviation maintenance has increased to 510 employees, with approximately another 100 employees joining Lufthansa Technik Malta by the end of the year at its new wide-body aircraft maintenance facility, which was inaugurated on April 4 2009. Taking inspiration from the aviation sector in Ireland, numerous synergies can also be created in the financial services sector.
The government recognizes that the Department of Civil Aviation requires reorganization to generate increased capacity without compromising Malta's safety record. Airport parking and hangar space are limited and legislative amendments are necessary to allow for clearer protection and security for aircraft assets registered in Malta. It is now time for Malta to rise to the challenge.
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