Convenience flags: Why some countries are more attractive than others when it comes to plane registration
Crystal clear Mediterranean waters, year-round mild weather and rich history make the island of Malta a top tourist destination, but this is not the only reason why. Ryanair, Wizz Air and Eurowings has set up shop in the smallest member state of the European Union.
Forty airline operators with a combined fleet of more than 500 aircraft were on Malta’s registry last month; This number makes the tiny Mediterranean country one of the few jurisdictions that far outweigh their weight when it comes to aircraft registration.
However, familiar names still top the charts. Data from aviation analytics firm Cirium shows the United States leading by huge margins in all aircraft types, including commercial, executive and general aviation; other major countries such as China, Canada and Brazil followed at a distance.
However, not all of the leading countries in aircraft registration are of the same size, as the case of Malta shows. Other smaller jurisdictions such as IrelandBermuda and the Cayman Islands have also created a notable niche in the global aircraft registration market.
You could argue that the reason behind these smaller countries offering a notable number of aircraft registrations is taxes. While some of these jurisdictions may indeed have tax advantages on aircraft registration, TPG has consulted with various industry experts who have underestimated the weak this element.
So why do some smaller countries offer comparable aircraft registrations? We took a closer look to find out.
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Stephan Piazza, a lawyer specializing in aviation and shipping consulting services, said: “Taxes have become less of a factor in attracting new aircraft licenses and registrations, especially for new aircraft. especially since the harmonized application of European directives in the tax area over the last decade. at the office of the accounting organization KPMG in Malta, said. “This is a trend that is likely to continue.”
If taxes are not behind high aircraft registration numbers in smaller jurisdictions, what is? Simply put, it is the speed of service that these countries can provide.
“The Malta Registry is a very service oriented body,” says Piazza. Regulatory approvals that can take months at a larger authority can be accomplished in a few weeks here, while ensuring the highest levels of regulatory compliance. “
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Others emphasized this point further, including David Colindres, president of the San Marino Aircraft Registry, which oversees aircraft registries in the small independent state of San Marino (where there is no airport). ).
“Service is the key here,” says Colindres. “When buying a jet, high net worth individuals and companies want to get them up and running as soon as possible, and this is what we were able to do. We pride ourselves on our very fast response. We work very closely and in line with the government, even though the registry is run like a private business.”
Unsurprisingly, this ability to quickly register aircraft seems to resonate with executive aircraft operators.
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Location, location, location
In addition to finding prompt service, operators aim to reap as much benefit as possible from their aircraft registration authority.
“When choosing where to register an aircraft, it is important to consider the local area,” said Brian Skehan, managing director and industry executive officer of SARC, a consulting firm specializing in aviation regulations. where the aircraft will primarily operate.
Doing so will likely come with some additional perks.
For example, Malta, Ireland and Austria are EU members, so their fleets can operate unhindered throughout the EU without the need for a Third Country Operator license.
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Important policy
Specific policies also contribute to deciding where to register aircraft.
International framework governing civil aviation – wherein the Convention on International Civil Aviation (also known as .) Chicago Convention) is a platform – providing a degree of flexibility for countries to prioritize certain interpretations of the registration rules so that they can appeal to more aircraft owners and operators.
For example, in some jurisdictions an aircraft must be registered by its beneficial owner; Other jurisdictions allow for more complex ownership structures, providing more flexibility for operators. The latter is another reason why Ireland regularly attracts operators to its shores to register their aircraft.
Malta’s ratification of the Cape Town Convention – an international treaty that protects ownership of highly mobile assets such as aircraft – in 2010 also explains how the country has become a major player in the trade. aviation service. In making this move and subsequently modifying the aircraft registration system to better suit its business interests, the country invested more in the maintenance and improvement of the facilities that operators have. then can benefit. We’re not talking about a simple footnote on the ledger here, but about hard, tangible metal rolling down the local airport’s tarmac.
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Key point
Just as countries compete with each other in an effort to attract foreign investment into their economies, the same goes for the market for aircraft registration. The aircraft registry has become an important tool for those territories, regardless of their size, who want to contribute to the development of the global aviation industry.
