Aircraft registration would lead to new economic activities

Nationalist MP Michael Frendo who on Thursday was elected Speaker told Parliament the Aircraft Registration Bill was an opportunity to generate new activities which would result in economic growth and more employment.

He was speaking during the debate in second reading shortly before being sworn in as Speaker, following the resignation of Louis Galea.

Dr Frendo said the Bill was well designed and planned, would need continuous updating to address the dynamic consequences that would emanate from it.

Noting that it represented an autonomous initiative and not an EU law that was being transposed into Maltese legislation, he said the Bill would put Malta on a level playing field with other jurisdictions in the aviation sector.

The proposed system would generate income for a number of stakeholders. The maritime experience had shown that it was not only the Exchequer that benefited from such registration but also professionals and service providers, thus giving Malta wider exposure as an international commercial centre. The Bill positively addressed various types of owners, real rights, guarantees and mortgages in relation to aircraft.

Dr Frendo said the registration of engines still under construction was an important development, and augured that this would develop the sector of engine financing. Consequently, the Bill was not to be looked at simply as a registration system but as providing a stepping stone to attract development in the sector of engine financing. Although this had not been so successful in the maritime sector, he urged the government to immediately work in this regard.

The inclusion of private aircraft and making the system also available to OECD jurisdictions was a positive trend.

Concluding, Dr Frendo said that by entering the framework of the Cape Town Convention, Malta was being put into the mainstream. He augured that Malta would continue to look for niches in international economy which could be further developed.

Ċensu Galea (PN) said the Bill would provide the opportunity to have more aircraft registered in Malta. This would have a positive effect on the Maltese economy.

Malta had worked hard to convince the USA that it had an airport of international standards in order to obtain a Category 1 status. Passengers felt at ease when travelling to Malta. Security was the watchword in everything done within the civil aviation sector because Malta's airspace, apart from resultant income, also meant heavy responsibilities.

Malta had to ensure high quality services to aircraft owners. The lessons learned from the merchant shipping sector should be kept in mind by those who would be responsible for the registration of aircraft.

Mr Galea praised the registration offices for operating on a 24-hour basis, because foreigners needed to work within the facility of their offices according to their own time zones.

The more aircraft registered in Malta, the more the Maltese workforce would benefit. As an example he mentioned Lufthansa Technik, which trained several Maltese young people in new trades.

Mr Galea said that one should attract aircraft owners who registered their yachts in Malta to also register their aircraft here.

Nationalist MP Francis Zammit Dimech said that coupled with the recent Financial Services Bill, this piece of legislation transmitted the message that Malta's economy was stable.

From a legal perspective there were similarities between the aviation and maritime sectors. Other differences were being clarified in the Bill, aiming to make the register as successful as possible.

If the right measures were taken, Malta would be able to boast greater competitiveness and stability, and grow exponentially in this expanding sector.

Strong foundations were necessary to attract investment, as were principles that allowed for wider liberalisation and privatisation opportunities. The expansion of the aviation sector was linked to the development of other sectors, and Malta needed to find new niches to act as an economic magnet.

Dr Zammit Dimech referred to the European Aviation Association which, after 10 years of success, promoted concepts such as the boosting of productivity, efficiency and competitiveness, accessibility and the protection of jobs. These had become increasingly relevant.

The Bill allowed for further opportunities for development while introducing new fiscal and administrative measures and encompassing all regulations linked to aviation. He emphasised the importance of Malta's adhesion to the aviation protocol in the Cape Town Convention.

The Bill helped to regulate rights related to Malta-registered aircraft and in this regard, Malta needed to convey a sense of stability. Malta's jurisdiction would offer this stability and the Bill allowed for this to happen.

Referring to the maritime industry, Dr Zammit Dimech said Malta had created a regulatory framework that was professional and had proved to be successful. The aviation sector should enjoy similar rewards.

He stressed the importance of the fact that the Bill promoted the concept of registering aircraft without the requisite of being an EU or EEC citizen. Registration should be sought even from outside EU frontiers.

The packages Malta needed to offer should not be any less advantageous than what other countries were offering to be globally recognised. The fiscal advantage was not covered by the double taxation agreement, and therefore Malta's taxation system offered a greater fiscal advantage than other countries did.

Dr Zammit Dimech called for guidelines for those taking loans to buy aircraft, a wider banking system, and depreciation calculation. These would allow Malta a more advantageous position to attract operators who acknowledged that the country offered a serious and advantageous infrastructure.

Concluding, Mr Zammit Dimech said the Bill allowed Malta to build a new niche and have an economic edge over other countries.

Charlo' Bonnici (PN) said that aircraft registration would give rise to other important services, but one must keep in mind that Malta would only be able to compete with general fiscal incentives. It could already be competitive in airborne security and standards.

Before the recession, aviation had been going though substantial expansion. Major manufacturers had warned of forthcoming slowdowns, but prospects were still good with billions of dollars' worth of aircraft orders expected.

Malta must have the legal structures and policies in preparation for this thrust. The requisites were already there, as in the maritime and financial sectors, and the geographical position was always a positive. It must build up the necessary structures, including legal, regulatory, financial, institutional and economic, to create a high added-value sector.

Mr Bonnici said Malta already had extensive experience in the financial sector, and its closeness to the English system was an added attraction, as was its adherence to the very strict regulations of the European Aviation Safety Agency.

The latest EASA audit had shown that Transport Malta was operating very professionally but lacked a number of necessary resources. The widespread use of the English language was also an advantage. In spite of the lack of resources, there were a large number of Maltese with considerable experience in the sector. The process of applications for aircraft registration had been lauded in the audit.

Malta's history of foreign investors of stature could be an asset in luring owners and operators to register aircraft in Malta. So could Malta's excellent record in safety and security in the air. Such plus points must be kept and strengthened.

Malta also had an impressive network of 55 air services agreements facilitating air traffic to several countries. Another good aspect was the country's political and economic stability.

Mr Bonnici said that as far as opportunities for the sector were concerned, international organisations were forecasting growth of five per cent. The aircraft register could also represent opportunities to move towards environmental progress.

Malta's prowess in aircraft maintenance was another indication of good training at Mcast.

Malta must also remain competitive. It could not diverge from what other registers were offering, even because of the EU's ongoing efforts to standardise.

Marketing Malta's aviation register should mean being present at the best fairs in Europe, business aviation conferences and exhibitions. If only they could be well utilised, Maltese embassies could be instrumental in approaching the right people.

Tariffs for registration must remain competitive, but ways must be found to enhance revenue to make up for expenses. Mr Bonnici said he knew this revision was already under way.

The Bill was unanimously approved.