With new legislation to establish an ambitious aircraft register and the long-planned Malta Transportation (Regulatory) Authority both earmarked for January, Malta should be well positioned to tap into one of the European Union's newest business opportunities.
Interested parties have until Monday to give their feedback on the draft Aircraft Registration Act 2009 (mitc.gov.mt) and Transport Minister Austin Gatt hopes to present it to Cabinet within six weeks. Meanwhile, the Department of Civil Aviation, the Malta Transport Authority and the Malta Maritime Authority will complete their financial year and then merge into a single body on January 1.
Dr Gatt says Malta's bid to have a successful aircraft register aimed primarily at private jets has been spurred by the prosperity of Valletta's maritime register - now considered the world's seventh largest and the EU's second - and by executives of Malta-domiciled financial services companies seeking to benefit from tax advantages by registering jets here.
Malta's main competitor jurisdiction for private jet registration within the EU is Ireland; globally it is up against the Channel Islands, Bermuda and the US. Commercial jet registration has not been entirely excluded from the equation but Dr Gatt says that sector is very country-driven. There are 81 aircraft currently registered in Malta.
"(Private jet registration) is something which is very new in the EU and competition only began three or four years ago," Dr Gatt told The Times Business yesterday. "The sector used to be very fragmented. A lot of US registrations are moving into Europe, some are going to Eastern Europe, many went to Ireland. The attitude has changed, and it is a new industry practically everywhere. Ireland has about 800 aircraft on its register. We have to tread slowly. The important thing is not to make the register open to anyone and everyone. We will market only among serious management companies."
The new draft law introduces innovative concepts to make the register competitive and has limited nationality and form requirements to make the register accessible to as many owners and operators as possible.
While extending the scope of granting security over aircraft, the register would also transpose the provisions of the Cape Town Convention on International Interests in Mobile Equipment and the Aircraft Protocol by adopting the national implementing legislation prepared by the Aviation Working Group for acceding states.
The new law also caters for market realities, such as fractional ownership and the ownership of aircraft by trustees or the possibility to register an aircraft while it is still under construction when it is uniquely identifiable.
Dr Gatt is confident that the numbers required for Malta to be able to boast a successful register are attainable as the private jet 'community' is considerably smaller than that of commercial shipping.
"Private jet owners usually hire them to clients through management companies," Dr Gatt explained when asked about Malta's marketing strategy. "The big players are the management companies and the players who are already present in Malta, like Comlux (the VIP aircraft operator) which hires out its own private jets. It is the management companies that we need to attract with one-to-one presentations."
He added that marketing the register and supplementary services will present opportunities to promote Malta's other assets including the flourishing financial services sector, the internationally recognised sound banking structure, and the possibilities for aircraft mortgages.
The register could also attract specialised companies involved in aviation purchasing, training, maintenance and training.
Two companies already offer private jet maintenance services locally. This sector has potential for growth as the register comes up to speed. The immediate pre-requisite for a successful register, Dr Gatt pointed out, was the availability of day-to-day aircraft servicing.
Management companies' back office operations could also grow as more personnel is required. The training sector currently sees three schools based in Malta with trainees hailing from Italy, the UK and North Africa.
The register's administration involves relatively attractive costs and the benefits are similar to those attributed to commercial shipping registration. Fees could make a considerable contribution to the economy.
As the register's manager, the Malta Transportation (Regulatory) Authority will be primarily responsible to ensure that any Malta-registered management company or aircraft observes EU safety regulations.
Dr Gatt is full of praise for the professionalism of the teams within the Civil Aviation Department which, he admits are understaffed, and plans are underway for the technical staff complement to be doubled.
Another short-term priority is undoubtedly the establishment of an executive terminal that meets the luxury standards expected by high net worth travellers.
"When the traffic picks up, we require a small terminal which is of an executive level to facilitate the arrival of private aircraft," Dr Gatt said. "These travellers are in Malta for four to five hours and spend a lot of money. They expect particular standards and they are ready to pay for them. We have spoken to Malta International Airport and they are amenable to it. It is a matter of planning and identifying the location at MIA."