Over 1,100 private aircraft are visiting Malta every year – 670 in the first seven months of this year – generating millions of euro in direct and indirect revenue, according to the president of the Malta Business Aviation Association, Stanley Bugeja.
The association has in excess of 30 members, which are involved with all aspects of the visit: the management of the aircraft, such as booking its slot, its certification and maintenance; its crew changes along with their accommodation and transport; and aircraft handling including fuel, catering, cleaning and spares.
Mr Bugeja said that politicians often spoke about the promotion of aviation registration, drawing parallels with Malta’s success in ship registration. But he warned that aviation was a completely different sector.
“With business aviation it is not about registering the ‘flag’ but about getting the Maltese Air Operator Certificate. The advantage of getting a Maltese one is that the same certificate allows you to fly both commercial and business jets.”
He explained that the European business aviation industry slowed down in 2012 by 7.2 per cent, with only eight countries reporting growth, led by Ireland (+7.6%), according to aviation market intelligence company WINGX Advance. However, while Europe was seeing a decline in business aviation, it was growing in Russia, Ukraine, Asia and the Middle East.
“This creates two challenges: The first is that there is not enough know-how in countries like Russia when it comes to business aviation and all the ancillary services they require within the EU. The second is that aircraft with non-EU AOCs have problems operating within the EU; for example, they might be obliged to make a stop within the country where the plane is registered or be severely restricted in their operations. For a businessman who is using a private jet in order to save time, it does not make sense to have to stop in Switzerland or not be able to pick a business partner from an EU airport, for example.”
This is just one of the reasons which has given Malta a competitive edge: Malta could geographically-speaking be a good option for a stop-over, especially for north-south and east-west routes, as many of the main European airports have night curfew which significantly restricts the operating schedule. In fact, Mitiga in Libya is the most popular destination from Malta, followed by Carthage, Brussels, Le Bourget and King Khalid in Saudi Arabia.
There are also fiscal implications. Aircraft using an AOC should be VAT exempt, rather than zero-rated. Despite this, a number of member states are threatening to charge VAT on both the acquisition and operation when the aircraft is used by a private individual even if the individual is a company.
Malta, on the other hand, has taken a proactive interpretation which only takes into consideration whether the aircraft has an AOC or not when applying VAT rules on both acquisition and operation.
EU law also specifies that the aircraft management has to be handled in the country that issues the AOC, which means that Malta has considerable competitive advantages because of its location, English-language culture and business-friendly approach.
Malta has not yet got a critical mass when it comes to business aviation. Its 1,110 flights have to be seen in the context of the busiest airport for business travel, Paris Le Bourget, which handled some 24,300 flights in 2012, according to industry expert WINGX. Across Europe, there were 63,000 business flights last May alone.
Mr Bugeja is very optimistic about the growth potential of this sector, but cautions that there are unnecessary irritants. One of the most cited ones –which could easily be solved with the goodwill of those concerned – is the fact that business aircraft are rarely given parking slots near the terminal, in spite of the fact that there are only around 20 aircraft on average using the nine parks at the airport on any given day.
This means that business jet passengers must cross the runway – which means waiting at traffic lights for the “all clear”.
“There were times we waited almost an hour. Longer than the flight itself,” Mr Bugeja lamented.
Aviation sources said that the solution was relatively simple: a service road could be quickly constructed skirting the end of the runway.
Mr Bugeja is cautiously optimistic that solutions will be found which will help this sector to flourish, and he is seeing very positive signals from the Government.
“The Government has embarked on an aviation policy and for the first time asked for feedback from AOC holders and service support companies in business aviation. That business aviation is included in the drafting of such policy is a good step in the right direction,” he said.