Malta: The European Aviation Hub

Last Updated: 9 October 2019
Article by DF Advocates

Dr Edward Meli from our Aviation Department, published the below article in the September 2019 Edition of the Commercial Courier, the official Business Magazine of the Malta Chamber of Commerce, Enterprise and Industry:

Malta has done its utmost to propel itself to the forefront of the aviation industry by creating a jurisdiction which is attractive for aircraft owners and operators. Over the last few years, the sectoral push has evidently provided positive results, considering the increase of industry players choosing Malta in their search for registration of aircrafts and Air Operator's Certificates (AOCs) within Europe.

What are the main reasons for the growth of Malta's aviation sector?

The increased popularity of the Maltese registry, showcased by the proliferation of aviation industry players choosing Malta, boils down to various key aspects including: i) the introduction of new revised legislation such as the Aircraft Registration Act 2010 ("Act") of which a bill for 'The Aircraft Registration (Amendment) Act, 2019' has been proposed this August, further displaying the Transport Malta Civil Aviation Directorate's ("TMCAD") will to keep developing the legislative framework within the sector; ii) procedures being implemented in various government departments to further develop the sector; iii) the ratification and transposition of the Cape Town Convention, which provides owners and operators of aircrafts access to the International Registry for the registration of security interests over Malta-registered aircrafts and their engines; iv) as an EU member state, the National Aircraft Register ("Register") permits free circulation of aircrafts in the eurozone – allowing tax free commercial operations; v) as an EASA certified state with an FAA Category rating, safety and security standards are of the highest level; and vi) the TMCAD are skilled and pro-active in providing an efficient platform for registrants, with which DF Advocates boasts a great relationship, allowing the firm to keep in close and direct contact with the TMCAD.

What are the benefits of registering an aircraft and AOC in Malta?

Malta boasts a substantial growth in the aviation sector with the number of registered aircrafts doubling since 2012 to over 340, in conjunction with an increase of AOC holders from 18 to over 35. This considerable increase in trust in the Maltese jurisdiction has been made possible by the continuous work undertaken by the TMCAD, together with the vast array of attractive benefits that Malta has to offer. The benefits afforded to registrants of an aircraft and an AOC coincide, emanating amongst others from the introduction of the Act which has provided broader registration opportunities. The advantages of choosing Malta include: i) the opportunity to maximise revenues made by aviation companies whilst keeping costs under control; ii) a strong growing aviation environment and favourable jurisdiction eager to attract key roles within the sector boasting a well-trained workforce in place; iii) relative fees are amongst the most competitive in Europe whilst maintaining a high-standard of work and safety; and iv) enjoyment of access to the European aviation market since Malta is a full EASA complaint jurisdiction. In view of the abovementioned benefits, Malta's already expanding aviation industry may reach new heights when Brexit takes place. The trust placed in the Maltese jurisdiction by big-name players such as TAG Aviation, which has shown overall growth since relocating to Malta, reiterates the fact that Malta is truly a viable option for relocation within the EU. Considering Malta's strong bilateral relationship with the UK together with a flexible, unrestricted, pro-active approach taken by Government and TMCAD, Malta has become an avant-garde jurisdiction offering great value to aviation companies wishing to setup base elsewhere.

Does Malta provide security interests over aircrafts?

The introduction of the Act has played a vital role in introducing new concepts, such as the incorporation of security interests over aircrafts. The TMCAD recognised that efforts must be made to entice financiers and lessors to Malta, therefore, the authorities created a wider notion of security interests within the Act paired with a dynamic registry, which integrates the aircraft and mortgage registers. The Act provides for the registration of a mortgage over an aircraft, and the recognition and enforcement of a foreign mortgage registered in the International Registry. Notably, within the Act, aircrafts constitute a particular class of movables whereby they form separate and distinct assets within the estate of their owners for the security of actions and claims to which the aircraft is subject. Thus, if an aircraft owner goes bankrupt or insolvent, all actions and claims, to which the aircraft may be subject, shall have preference, on the said aircraft, over all other debts of the estate. In addition, since Malta is a signatory of the Cape Town Convention, owners of an aircraft also have the right to grant an Irrevocable De-Registration and Export Request Authorisation ("IDERA") which once issued will be recorded at the TMCAD.

It is clear that Government and TMCAD are ready to listen to the market and provide an end result that is both up to date with today's market and conducive to industry players' needs. This is where Malta, after years of sectoral improvement, comes across as an aviation friendly jurisdiction doing its utmost to promote the industry.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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