Ryanair is to service some of its aircraft in Malta at a new €20 million maintenance and overhaul facility alongside Malta International Airport. The Ryanair group has some 500 aircraft. This new investment is expected to create 250 new jobs. It is another milestone in the evolution of our country’s aviation sector which has grown exponentially over the last two decades.
In 2003, Lufthansa Technik opened a large facility servicing its aircraft in Malta. Since then, major international airlines set up shop in Malta, creating hundreds of new jobs. Only recently, Wizz Air set up a new airline – Wizz Air Malta – with its principal place of business in Malta. Aviation has become a powerhouse industry. Globally, it is estimated that the industry supports $3.5 trillion of the world’s gross
domestic product (GDP).
Malta’s aviation industry comprises a multitude of sectors such as maintenance and repair; research and development; call centre operations; back-office support; flight training; financial services and ICT for the industry; and research and development on unmanned aerial vehicles.
The Safi Aviation Park, a €40 million investment on a 240,000 square metre facility, was pivotal to enable the aviation industry to flourish. Leading companies in the industry, such as Lufthansa Technik, Medavia Technic, SR Technics, Aeromaritime, DC Aviation, Air X, Gulf Helicopters, Aviation Cosmetics, Comlux and Simliner Malta Aviation Centre make use of the Safi Aviation Park
Aircraft registration, following the incorporation of the Aircraft Registration Act in 2010, too has grown exponentially. The Malta Register is regarded to be the fastest-growing aviation register in Europe. This year, Malta’s aviation register accounts for more than 660 aircraft – a remarkable growth of 500 per cent in 10 years.
In 2020, the Maltese government launched aircraft leasing, a growing niche as more airlines seek to lease instead of buying aircrafts. Leasing companies look for reliable jurisdictions where to register their aircraft and Malta is well placed to offer its services. Malta charges no withholding tax on lease payments where the lessor is not a tax resident of Malta.
Malta’s investment in this sector; our status as an EU member state; adopting the standards of the European Aviation Safety Agency; our geographical location; the resilience of the industry; and the skills of local employees enabled Malta to sustain the sector despite the havoc caused by the COVID-19 pandemic to the aviation industry. During these trying times, there was a shift from the carriage of passengers to the carriage of cargo, another sector which has flourished in recent months.
In 2019, the aviation industry accounted for over 5,000 jobs, contributing €600m to the Maltese economy- Frank Psaila
In 2019, the aviation industry accounted for over 5,000 jobs, contributing €600 million to the Maltese economy during the same year. Grouping the aviation sector public entities under one ministry in 2020 and the setting up of the Aviation Advisory Committee (AAC) in 2021 were a step in the right direction.
MCAST courses (with the support of Malta Enterprise – in 2019, both entities launched the #chooseaviation campaign, aimed at attracting students to the industry) for technicians within the aviation sector have proved popular and are pivotal in ensuring a skilled workforce in this lucrative field. The University of Malta too offers tailor- made courses in this field, notably the Institute for Aerospace Technologies with students specialising in the fields of air traffic control, aircraft maintenance and avionics.
Malta’s financial benefits and opportunities offered to this sector are crucial in sustaining the industry. Income from the leasing, ownership or operation of an aircraft used in the international transport of goods or services is considered to be earned outside of Malta – income deemed to arise outside Malta will be exempt from Maltese tax, together with other direct and indirect tax opportunities for leasing of aircraft, are all favourable conditions that have encouraged further investment in this field.
Malta’s aviation industry has a bright future but we cannot afford to be complacent. Competition is big and excessive bureaucracy and red tape are of no help to remain competitive and cost-effective. We should work more on the education system to ensure we provide more students to the maintenance, repair and overhaul (MRO) industry which, I’m informed, will require another 250 engineers and technicians in the next few years, a quarter of the current workforce employed by the MRO sector.
We need to sustain this industry and ensure its further growth. This depends on the decisions we make today.
Frank Psaila is a lawyer specialising in international relations.