Business aviation found in Malta a friendly jurisdiction, explain Stanley Bugeja and Razvan Stefan.
As part of its economic development strategy, over the past years Malta has been supporting diverse sectors in the aviation industry. What’s your opinion about the contribution of the aviation sector to the Maltese economy?
Stanley Bugeja: Malta is a business aviation friendly jurisdiction. The reason for that is an attitude by everyone involved in this industry, that we are open for business. Normally, not only in Malta but everywhere, we hear about various levels of bureaucracy when dealing with Government matters. In real fact, what the industry has experienced in Malta is that it’s one of the few places within the EU jurisdiction where things are done efficiently and properly. In Malta we have a can-do attitude while following the necessary regulations. For instance, if you want to register an aircraft, this is done, even if over the weekend or early morning.
Razvan Stefan: Malta has a very friendly business-oriented approach from both the regulatory perspective, which is according to EU laws and hence legal and safe. Being friendly means you can do things outside office hours and during public holidays.
These advantages aren’t found in other jurisdictions within the EU.
From a tax perspective, business aviation is attracted towards Malta and it is important to be correctly understood, that everything that is being done is within the EU regulations and not as an offshore jurisdiction. Today, business aviation in Malta is the second fastest growing industry, after gaming.
No doubt this sector is one of the fastest growing sectors in the EU. What are the positive trends of this industry?
Stanley Bugeja: This industry doesn’t exist in a vacuum. Malta is an island – we need to connect it with the rest of the world and people need to travel from one place to another. Our industry increases connectivity as traditional airlines are market-based in a country. The main airports are in the bigger cities and the smaller cities starts to struggle – hence imagine an island, like Malta, which is even smaller than the smaller city in a bigger country. So Malta probably is better connected than many smaller cities by the traditional airlines.
When you have the economic growth we are currently experiencing, you need to travel beyond Frankfurt, Rome, Milan or London. You need to go to other airports outside the European Union and far away from home. You would want to go to places which most people have never heard of. Moreover, you would want to go to these places directly, quickly and according to your own schedule.
For instance, if you have a meeting in Malaga it takes you a day to get there for a one-hour meeting and another day to come back – in today’s world that doesn’t make sense. Also, my mother company is in Stuttgart, Germany. This is the capital city of car manufacturing in Germany and not far away from home – yet for me to arrive there, I have to leave one day before, do my management meeting and come back the next day. I would have wasted three days.
One of the most positive trends of this industry is connectivity
I don’t travel by business jets but if you are a multi-national or a multi-million company and you’re expanding into Malta, you’re probably travelling by business jets. Most of the routes that we fly are not served by the airline industry. Therefore, Malta needs business aviation and the business aviation found in Malta a friendly jurisdiction.
In Malta we don’t have any natural resources, so our economy is based on the service industry. Different governments in Malta are always looking for industries that support and create jobs. Malta has been successful in shipping and some time ago, the Maltese government thought we could try and emulate what we have done in the shipping industry with aviation. In 2010 we had the Aircraft Registration Act and that was the first step that triggered business aviation in Malta.
Razvan Stefan: One of the most positive trends of this industry is connectivity. We have a lot of challenges and people want things to happen fast because time is money. As business aviation, we are working with people who don’t want to lose time, such as celebrities, sportsman and politicians. Business aviation flies to three times more destinations than the normal airlines do.
What is happening today is that a client goes to an operator, orders a flight from, for instance, Malta to Tokyo and this would take them, from the request till take-off, 10 to 15 hours, including permits. Business aviation is more personal. Today we have around 30 operators in Malta and we are fast approaching 40.
How can you describe the strength of the Maltese SMEs within the aviation industry?
Stanley Bugeja: It is very strong and I’m a huge supporter of that. Business aviation is about efficiency. So, it’s not about big companies but smaller companies – traditionally they might have between 10 to 50 employees and an average of around one to four aircraft, which fits perfectly in the Maltese environment.
From an economic point of view, it’s even safer than getting one company that employs, say, a thousand people. The spread in this case is wider, so the risk from an employment point of view is smaller, the industry is strong and will probably remain strong as we cater for a niche market. This industry caters for people travelling to a specific place or because they are known faces, hence due to security risks it’s bound to remain strong. Today, our industry employees 3,200 people in total.
Razvan Stefan: It’s very strong. It’s a matter of connectivity, practicality and challenges. Today, there are challenges out there in the aviation industry that people might not imagine. For instance, no one knows what will happen with Brexit and other political situations like in Iraq and Iran. Or else you can have other problems, like an aircraft that can’t travel directly from Russia to Ukraine. So, the strength and connectivity in Malta is very important and this is due to the country’s geographical position. Maltese SMEs are exploiting in a good way this concept.
What’s the future of aviation, in Malta and the world?
Stanley Bugeja: I don’t have a crystal ball but at least in our time we would be travelling by air and it’s bound to become stronger because the population will increase. We would need to go to more places to earn a living. However, the mode of transport by air will change significantly in the next decade or so. I think it will become simpler, more autonomous and available for everybody. We might start seeing unmanned flying taxis carrying passengers from Sliema to Valletta.
For Malta’s future, I would want to see aviation grow and the airline industry to stabilise. As a country I don’t think we can afford to grow mass tourism more than what we have as this might have a huge environmental impact and our infrastructure is not ready for it.
Razvan Stefan: The future is challenging. The present situation within the aviation industry in general won’t change within the next decade or two. With regards to electrical aviation, this will happen, but it will take a minimum of 20 to 25 years more to get to a level of operation and safety, as we have today with traditional aircraft. The industry will continue to exist and grow. People owning an aircraft for business aviation, would pay millions to have an aircraft that would take them whenever they want at any time. These people will continue to exist and 60 per cent of them don’t use their personal aircraft as a toy but an asset. So, definitely this industry has a lot of potential to grow and it will do so in the near future.
Stanley Bugeja is managing director of DC Aviation (Malta) Ltd. and Razvan Stefan is accountable manager and CEO at Emperor Aviation.
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