Malta’s aviation industry may fly even higher following Britain’s exit from the European Union, according to government and industry stakeholders, who have emphasised the island’s bilateral relationship with the United Kingdom and strategic geographical position as potential assets.
This follows on reports of exponential growth in the sector: the number of registered aircraft has doubled since 2012 to more than 280, and the number of Air Operator Certificate (AOC) holders has increased from 18 to 35, according to Dr Ian Borg, Minister for Transport, Infrastructure, and Capital Projects. In reference to questions sent by this newspaper on the opportunities presented by Brexit and the overall growth of the aviation sector, Dr Borg emphasised the dynamism of the industry, stating that “the word ‘static’ doesn’t feature any-where” and that Government was constantly maintaining “an open-minded, pro-active, reliable approach, which an avant-garde jurisdiction truly deserves.”
Elaborating on the Minister’s comments, a representative from Transport Malta noted the uncertainty surrounding Brexit, underlining the necessity for clarity “to what the imminent future holds vis-à-vis Brexit,” particularly in such a highly-regulated industry. “Malta is determined to maintain its strong bilateral relationship with the United Kingdom, and the possibility of companies having a supporting infra-structure in Malta is also part of that relationship,” the spokesperson said, further noting that “one has to duly consider the importance of connectivity, choice and value for money for UK and European citizens and workers alike.”
“As Malta responded to past opportunities related to the maritime aviation and financial services sectors, it is important to put in place, maintain and sustain the basic building blocks which are required for the aviation sector to grow, and not come to a standstill or dwindle down,” Transport Malta said, noting that the “regulatory, administrative, educational, financial and fiscal requirements” which form part of these building blocks, whose end goal is “to create a high value-added aviation sector, where new job opportunities are created, and existing ones are sustained through the availability of a skilled workforce, revenue generation and economic growth.”
Dr Silvana Zammit, the Partner in charge of Aviation Law at Chetcuti Cauchi Advocates, which deals with the registration of aircraft in Malta as well as the transfer of ownership, aircraft finance and registration, reiterated this cautious optimism in the potential for Malta to excel following Brexit. “Being part of the European Union and signatory to the Cape Town Convention, together with having a trustworthy and efficient register, Malta is proving to be a feasible and advantageous option for business owners and aviation enthusiasts alike,” she asserted.
Dr Zammit stated that the aviation industry is “undergoing its fair share of turbulence” in light of current geopolitical changes, such as Brexit, referring to a recent IATA report which evaluated the future of the airline industry, listing Britain’s exit from the EU as one of the main influential factors shaping the industry. “Any restrictions to aircraft entering and leaving Britain post-Brexit, together with the requirement for EU airlines to have effective management and control in the EU, might hit hard operators setting up or dealing with the UK,” she explained. Indeed, this might force them “to look for feasible and practical solutions,” which could include Malta.
Erik Weisskopt, Managing Director of Hyperion Aviation, an aircraft management, maintenance and leasing provider, who specialises in providing turnkey management for, mainly, individually-owned aircraft, reiterated these thoughts, saying that he would expect Brexit to make an impact on the company’s client lists. He stated his belief that Malta is “already a winner,” noting that Tag Aviation and European AOCs “have all shown overall growth in Malta.” Malta’s success was due to two main factors, he said –“the overall economic growth and rebound of the economies and the service and quality that we can offer in Malta.” This quality, according to Mr Weisskopt, was evident in Malta’s “high density of re-sources, with specialised aviation people available” and the “unrestricted commitment the government is showing to the industry.” He further emphasised that Malta can offer a lot to aviation companies seeking to move their base, particularly in relation to aircraft finance.
“Several major aircraft financiers have advanced credit to owners for the purposes of purchasing air-craft which are registered in Malta. Such financing is secured by virtue of a Maltese-registered mortgage. Moreover, the recent introduction of the Aircraft Registration Act further strengthens the position of such financiers,” he explained. However, he also advised caution, asserting that stakeholders and operators have to wait in order to fully understand the knock-on effect of Britain’s exit from the EU on the sector in Malta, and internationally, stating that he doubted there would be as big of an impact on aviation as in other sectors. “Although aviation will continue to operate under the current terms until the end of2020, we await clarification about aviation to see exactly what impact this will have on clients,” he concluded.
This article originally appeared in The Malta Business Observer