Finding the Right Home for Your Aircraft (Corporate Jet Investor Panel - CJI Asia 2023)

Choosing an aircraft registry is an important decision for every private / corporate aircraft owner, and there is a lot to consider.

We were delighted to have led a panel discussion at Corporate Jet Investor Conference 2023 in Singapore on the topic ‘Finding the Right Home for Your Aircraft’. The panel was moderated by Stuart Miller, an aviation Partner in our Hong Kong office, who brought together industry experts including representatives from three offshore registries: Sidhant Sharma from 2-REG Aircraft Registry in Guernsey, Edwin Kelly from the Registry of Aruba, and Kyle James from the Bermuda Aircraft Registry. 

The panel discussed various issues that private / business aircraft owners typically consider.  This note outlines some of those considerations, which included the following:

• Registration Qualifications
  • Not every aircraft owner is permitted to register aircraft at every aircraft registry around the globe.  Aircraft owners must check, on a case-by-case basis, if they can satisfy the requirements for registration (and if there is a preferred or optimum ownership or registration structure) for their aircraft at a relevant aircraft registry.
     
• Intended Use of the Aircraft
  • Owners should consider whether their aircraft will be operated for solely private use or for commercial use (including any occasional third-party charter).  Different aircraft registries may have different registration requirements depending on the intended use of the aircraft.
  • Owners should carefully consider their likely flight mission requirements when choosing an aircraft registry. Different aircraft registries and geographic locations may apply different operating restrictions, such as limitations on airspace usage, noise abatement regulations, curfews or environmental restrictions.
  • Cabotage and applicable flight permissions are important factors when considering intended flight routes.
     
• Taxes, Customs and Costs
  • Different jurisdictions apply different tax, import and customs requirements in relation to aircraft registered or operated in different jurisdictions. 
  • Different aircraft registries and authorities may apply different fees and cost structures in relation to obtaining (and maintaining) aircraft registrations and in relation to operating aircraft in their respective jurisdictions.
  • Owners should typically consider in advance whether these jurisdictional requirements, fees and cost structures are practical, efficient and suitable for their intended circumstances.
     
• Availability of Aircraft Registry Services
  • Owners may consider the accessibility and availability of a registry’s primary services (for example: daily opening hours, weekend / holidays service, and if it has a digital online registration and information system that is easy to navigate).
  • In relation to aircraft technical services, owners may wish to check the typical availability of a registry’s qualified technicians, inspectors, and support services (on both a global basis and in their home jurisdiction) to understand the likely timetables for obtaining aircraft maintenance and inspection services.
  • Some registries may be considered more efficient and personal than others in undertaking registry processes and in resolving issues.
     
• Regulatory Oversight and Safety
  • All panellists agreed on the importance of aircraft registries enhancing aviation safety whilst ensuring practical and operational efficiency.  Owners should not see registries as ‘flags of convenience’, as all aircraft registries have a responsibility to enforce and uphold safety requirements.
  • Different aircraft registries apply different regulations covering aircraft safety and operational compliance matters. Owners may consider the regulatory requirements applying to practical matters, such as any restrictions or processes for training and certifying flight crews and the types of pilot licenses required. Different registries may apply different standards (for example, most notably FAA or EASA requirements).
  • Owners may also wish to consider whether the aircraft registry jurisdiction has a robust and effective jurisdictional law that may facilitate matters relating to the aircraft (for example, an efficient court system).
     
• Confidentiality vs Publicly Available Information
  • Different aircraft registries and jurisdictions regulate the disclosure of information differently, and owners may wish to consider the extent to which identifiable information will be publicly available under different registries.
  • As well as privacy considerations, owners should also ensure that sufficient information is publicly available when applicable.  For example, owners wishing to finance their aircraft may need their aircraft registry to satisfy a financier’s requirements for information (publicly available or otherwise) evidencing aircraft ownership and mortgage / security interests.
  • The extent to which ownership and aircraft-related information is publicly available differs between aircraft registries and jurisdictions.
     
• Reputation of Registry
  • Owners may consider the reputation of an aircraft registry internationally. Both the regulatory framework and reputation of an aircraft registry could have resale or residual value implications.

We thank Corporate Jet Investor and each of our panellists for the opportunity to discuss these issues on stage in Singapore, and would be delighted to discuss with our readers any issues of interest further.
 

Co-authored by:               

Stuart Miller, Partner

Kate Tang, Trainee Solicitor

This publication is intended to be used for general references only. It does not claim to be comprehensive or provide legal or other advice. Whilst every effort has been made to ensure information provided herein are accurate and up-to-date, no assurances are provided in this regard. For these reasons, it is not intended to supplement or be a substitute for the expertise and judgment of your independent legal advisor. Any reliance on the information provided herein is solely at your own risk. Accordingly, to the fullest extent permitted by applicable law, Clyde & Co excludes any liability or responsibility for any loss which may arise from reliance upon information provided herein.