The first use of aircraft registrations
came about in the early 1900’s
and tail numbers were based on
the radio call sign which was allocated
to a particular nationality. Aircraft
registration has advanced dramatically
since then. More recently, a number of
aircraft registries have been established
in offshore jurisdictions and are viewed
by many as a complementary facility to
the offshore financial services industry.
In addition to offering private aircraft,
mortgage and engine registers, most
offshore aircraft registries will also provide
ancillary services such as airworthiness
certifications, radio and pilot licensing.
The Channel Islands Aircraft Registry (the
2-REG) launched in December 2013. It is
similar to the Isle of Man Aircraft Registry,
which launched in 2007 and had registered
some 650 aircraft by the end of 2013.
Bermuda and Cayman’s registries are also
enjoying similar success and there are
plans for several more offshore jurisdictions
to establish aircraft registries in the near
future. The pertinent reason for Guernsey
to introduce the 2-REG is to be able to
cater for all the wealth management needs
of its international client base.
so, why is demand for offshore
aircraft registries increasing?
• As manufacturing technology develops,
private aircraft ownership is becoming
a much more affordable option to
individuals and businesses, particularly
those looking to take a step up from
jet chartering and fractional ownership
schemes. For example, excluding
running costs, a new 6 seater jet, able to
fly non-stop from London to Cairo, can
be purchased for less than US$9 million.
• We have seen substantial economic
growth in countries such as China and
Brazil. China is well known to be one of
the fastest growing private jet markets
in the world. Its expansion is inhibited
to a certain extent, mainly due to a
general lack of infrastructure, technical
knowledge and experience. Some large
corporates are resorting to constructing
their own airports to cater for their fleet
of business jets.
• Most individuals who are wealthy
enough to be able to afford an aircraft
will often already have pre-existing
offshore structures and will be familiar
with the associated benefits.
One of the most common ownership
structures used to hold private aircraft is
a limited company. In recent years, there
has been a shift away from appointing
corporate service providers in less
regulated jurisdictions towards choosing
more reputable jurisdictions such as
Guernsey. Clients and their professional
advisors now attribute greater value to
reputation and integrity and understand
the additional compliance cost that this
may bring. It is worth pointing out that
while the initial, upfront costs of doing
business in Caribbean jurisdictions may be
less than using Guernsey, in fact, over the
longer term, the expense is likely to be
It is rare to find a client holding an aircraft
in their own name, without the protection
of limited liability and separate legal
personality. Use of a company provides
the confidentiality that many people seek.
The risk of negligence as regards the
safety, maintenance and operation of the
aircraft is significant, and in the event of
an accident, by using a limited company,
the liability of the beneficial owner is
limited and they should normally be
protected from any claims.
what does the future hold?
While the concept of a trust can be
dated back as far as the 11th century, the
fiduciary industry as it is today did not
really evolve until the 1970’s. Companies
featuring both separate legal personality
and limited liability have been around
since the mid 1800’s. Guernsey’s own
trust and company laws have undergone
an overhaul in recent years and are both
forward thinking and practical. With the
addition of the 2-REG, Guernsey could
soon become the jurisdiction of choice for
corporate aircraft ownership.
Private aircraft ownership is on the rise.
Individuals and businesses are seeking
more efficient methods of commuting to
and from their business destinations. In
many cases, the flexibility, convenience
and time saving that private flights can
offer to the user is more valuable than the
ticket cost saving of flying commercially.
The general view of the aviation industry
is that we should start turning attention
towards South-East Asian countries where
GDP growth is on average, significantly
higher than Europe or the US. In countries
such as Singapore, Thailand and Indonesia,
the number of business jet fleets is
Private aircraft ownership is set to
become common place. If we can keep
pace with demand for appropriate aircraft
ownership structures, the future for this
sector is bright.
The addition of the 2-REG could see Guernsey become the jurisdiction
of choice for corporate aircraft ownership, according to Marianne
Domaille, Director of Albecq Trust Company Limited.