Wednesday, July 4, 2012
Wednesday, July 4, 2012
Callenders & Co senior associate Llewellyn Boyer-Cartwright, a former commercial jet pilot and the first Bahamian to be admitted to the Lawyer Pilots Bar Association, has outlined a three-step process that he says could pave the way for the establishment of an international aircraft registry in The Bahamas.
Boyer-Cartwright says the initiative would lead to the creation of hundreds of jobs and countless entrepreneurial opportunities.
According to the senior lawyer, the first step is to ratify the Cape Town Treaty (Aircraft Convention).
“Becoming a signatory to the Cape Town Convention builds international confidence in The Bahamas as a serious and competitive aviation jurisdiction by eliminating uncertainty about who has a right to buy, sell, lease or even repossess an aircraft or its engines,” he says.
“It is the equivalent of having a GPS or tracking device, so you always know where what you own or lease is at all times. Without that protection, an engine could be sold while it is thousands of miles away from its owner whether that owner is a corporation, institution or individual. It sounds bizarre, but it can and has happened where engines have been sold to third parties. The only protection is to be covered under the Cape Town Treaty Convention. This is really important in a world where the biggest increase in the aircraft industry is in smaller planes, in fractional ownership and corporate jets.”
The US, the European Union, India, China and, in the Caribbean region, Aruba, are signatories, he notes.
“Not being a signatory to the Cape Town Convention puts us at a great disadvantage,” Boyer-Cartwright continues. “I think the only reason we are not is that it has not been a priority. It was just not at the forefront of anyone’s mind. There are no drawbacks. It’s totally a win-win situation.”
The second step is to create and appoint a committee or body to establish the framework for an aircraft registry and create an Aviation Authority.
“This should involve representatives from all interested sectors, finance, law and, of course, Civil Aviation,” says Boyer-Cartwright, who flew thousands of air miles before turning his attention to law and joining the country’s oldest law firm, Callenders & Co, headquartered in Nassau with satellite offices elsewhere.
The third step, but one that is not immediately essential to the start-up of an aircraft registry, is the removal of 10 per cent stamp duty on aircraft.
“Elimination of duty on aircraft would not be a great loss to government, as little duty is collected now because there are so few aircraft on the register in The Bahamas. It would also be more of an incentive for domestic or Bahamas-based airlines to own rather than lease aircraft.”
“There are so many other ways to generate revenue through dutiable goods and supplies for aircraft maintenance and operation that the way we are doing it now is actually, in my opinion, costing rather than creating revenue.”
He adds, however, that duty-related discussions should not stop government from taking immediate action to set the establishment of an international aircraft registry in motion.
“Aruba has done so well as a jurisdiction that some 10 per cent of all the aircraft on the international register, which is held electronically in Ireland comes through the Aruba registry. But we can catch up and I believe that we can surpass other regional jurisdictions for several reasons, including our advantageous location. If we do this and we do it right, the benefits can be enormous.”
“Because of our advantageous location, we can become a recognized international aircraft centre with a maintenance facility that is used by many aircraft operators and airlines, especially those in the Caribbean and Central and South America. We can become one of the top centres in the world for financing, leasing, servicing, charter, training and all the ancillary services.”
According to Boyer-Cartwright, an international aircraft registry provides comfort for financing and leasing companies, allowing them to offer better rates.
“The establishment of an international aircraft registry with standards that meet or exceed those of the International Civil Aviation Organization (ICAO), the regulatory body, could open countless jobs and entrepreneurial opportunities,” he says.