Industry Surveys

European Winners, Losers As Private Jet Registrations Soar

Tom Burroughes Group Editor London 7 December 2021

European Winners, Losers As Private Jet Registrations Soar

Figures for the 2019 to 2021 period reveal which jurisdictions have gained more aircraft registrations and which have lost some ground. This news service drills into why some of these changes have taken place.

International financial centres such as Malta, Switzerland and Guernsey compete as registration hubs for aircraft, and new data shows that some locations are winning while others have hit an air pocket.

With aviation registry being developed by some offshore centres as a revenue earner, data can shed light on their competitive edge more broadly. And it appears that COVID-19 hasn’t sapped the desire to own private jets and develop registrations. Quite the opposite – at least for those who can afford private aviation.

Between 2019 and 2021, Germany saw the biggest increase in registered private jets (a rise of 36), followed by Malta (30) and Guernsey (18), according to figures from Colibri Aircraft, a private jet broker which specialises in the marketing, resale and purchase of pre-owned private aircraft. The Isle of Man, the UK and France saw the biggest decline in the number of registered private jets between 2019 and 2021 – falls of 33, 22 and 10 respectively.

“The private jet market has held up extremely well during the coronavirus crisis. Given well documented troubles in the commercial aviation sector with flights being cancelled for example, and with nearly 700 the fewer touch points flying privately (2), existing owners of aircraft are keeping hold of them, and the market has seen new companies and people looking to buy their first jets," Oliver Stone, managing director, Colibri Aircraft said.

The European countries experiencing the largest rises for private jet registrations from 2019 to 2021 were: Germany (36); Malta (30); Guernsey (18); the Netherlands (11); Switzerland (11); Belgium (10); Hungary (9); Austria 8); Poland (7); and Estonia (5). The losses were among the following jurisdictions: the Isle of Man (33); the UK (22); France (10); Portugal (6); Luxembourg (5); Italy (4); Sweden (3); Ireland (1); Denmark (1); Montenegro (1); and Latvia (1).

While such changes must be interpreted carefully – a country with a large registration number can lose numbers while remaining near the top – the figures might suggest that countries such as the UK need to work harder to attract this business, particularly given post-Brexit uncertainties.

This news service asked Colibri’s Stone about what is going on. He gave the case of the Isle of Man – which has suffered an outflow – as an example of how changes occur. “[The] Isle of Man also hard to say, but most likely they are a victim of their own success. They were the first large scale offshore register and there are now lots of other options. They are likely losing out to other offshore entities such as Guernsey and San Marino,” he said. 

There are various criteria that would-be registrants look for, he said. [Requirements such as] “Pilot licences, maintenance approvals, ease of doing business and acceptance by other jurisdictions You want a register that will make it easier to own and use your aircraft.”

If they accept only EASA [European] pilot licences, only FAA [US], or both, it makes a difference for crew. Similarly, how easy is it to have maintenance carried out on an aircraft with a foreign register? Some registries make this very simple and straightforward while it is difficult with others. Hiring crew and having access to maintenance are vital for ownership and these should be researched closely, Stone said. 

More broadly, private jet use is booming – a fact that will raise the blood pressure of anti-fossil fuel activists. Aviation data provider WingX reportedly saw (source: Financial Times, November) a record number of flights in each of the last six months with over 4.2 million flights by private jets taking place in 2021. Private jet flights rose by 54 per cent in the first week of November from a year before.

Reach for the skies
Certain jurisdictions, such as Malta, have pushed hard at the aircraft registration side. For example, in Malta, income derived by a person from ownership, the operation of leasing of aircrafts is not taxable unless this is remitted to Malta. There is no withholding tax on outbound lease and interest payments made to non-resident persons (source: Dixcart Group Limited, Montaq, 6 April 2021). In Guernsey the jurisdiction’s 2-REG system enables users to follow a variety of regional and national aviation regulatory regimes, such as the FAA in the US, the CAA in the UK and the EASA system in Europe. Such flexibility is attractive, practitioners say. 

Any discussion of how the sector has fared cannot ignore the pandemic. Whether an HNW individual or not, people – including aircrew – have had to cope with quarantines, tests, lockdowns and other restrictions used to contain the outbreak. But the focus on social distancing and hassles of big airports certainly play to the appeal of private jet travel for those with large wallets.

“The commercial aviation industry has been significantly hampered by COVID-19 travel restrictions and, as a result, the private jet market has experienced exponential growth since 2019,” Stephenson Harwood partner Rebecca Garner told this news service.

“The expanded consumer base has been driven by the increased numbers of first-time entrants seeking an alternative means of air transport, whether for business or pleasure. It will be interesting to see how many of the new entrants remain in the private market when commercial aviation recovers and restrictions are lifted,” Garner said. 

This news service asked Colibri’s Stone why Germany had seen registrations rise in the 2019 to 2021 period. 

“German growth is mostly due to the strength of Germany's economy and the fact its geography allows for light and mid-size aircraft to cover all of Europe. The combination of wealth and the geography to allow for lower priced aircraft (which have a larger target market) make for such growth,” he said. 

Malta’s regime has been well thought out, he said. 

“Regulation is the key. They have an active and helpful Civil Aviation Authority there which has been great at encouraging AOCs (ad hoc charter airlines) to open there. Almost none of the planes are owned by Maltese residents, but are instead EU owners choosing Malta over other countries' registers as Malta makes it easier,” he said. 

In general, Stone is positive, as one would perhaps expect. “The private jet market is booming at the moment. Aircraft are very hard to find and are selling at asking price and sometimes higher. Prices of some models have increased 30 per cent in the last six months. This is a market dynamic that hasn't existed since the 2007 boom days. This is driven largely by the US where there are no internal travel restrictions and tax incentives to buy a private plane,” Stone said.

So far, the criticisms sometimes levelled by climate change campaigners at users of private jets haven’t prompted users to cut down. “We have not, yet, seen any negative impact from the green focus. How long this lasts remains to be seen, but thus far it hasn't been a factor,” he said.

Stone argues that the sector deserves more credit than it gets. 

“The biggest item that is overlooked with private planes is that they are a huge source of well-paid jobs. Most people, especially when criticising private planes, focus only on the users of the product and not the army of service providers of the product,” he said.

“Private aviation is a large provider of skilled, technical and well-paying jobs. Pilots. engineers, lawyers, insurance companies, service companies such as brokers and management companies' schedulers, terminal staff, etc, etc. Tens of thousands of people work in the industry and are usually paid well above national median salaries. It is an industry that is unfairly painted as one only about the users and overlooks those that keep it running. In a world where political leaders love to create well-paying skilled jobs, this is a good industry to encourage.”

“For an example of this – look at the new maintenance facilities for Gulfstream at Farnborough and Bombardier at Biggin Hill. These are two enormous investments that will employ probably a thousand people between them, all of whom are [doing] highly skilled technical jobs that pay far above national medians,” he added.

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