By NEIL HARTNELL
Tribune Business Editor
The Bahamas wants “to have something tangible in place” for an aircraft registry by year-end 2019, it was revealed last night, after hiring a leading consultant to give effect to its ambitions.
Algernon Cargill, pictured, director of aviation, told Tribune Business that such a registry will be “well in place” by 2020 after confirming that the government had signed a Memorandum of Understanding (MoU) with the company responsible for creating such facilities in Aruba and San Marino.
The Bahamas is now looking to “piggy back” off the expertise and reputation previously established by the Aviation Registry Group, with Mr Cargill conceding that it will take some time for this nation’s planned registry to establish the desired “global profile”.
He added that the MoU showed the government was now moving to execute on the objectives set in the 2018-2019 budget, when the government eliminated the ten percent customs duty on airplanes and helicopters - a development hailed at the time as removing a major obstacle to the creation of a Bahamian aircraft registry.
Reaffirming the Government’s goal of creating “a first class aircraft registry”, Mr Cargill said the MoU - signed between the Aviation Registration Group, and the department of aviation and Bahamas Civil Aviation Authority - was the first step towards unlocking potentially “enormous revenues” for this nation.
While not specifying how much revenues could be realised for the Public Treasury, he added that the MoU - signed two to three weeks ago - was the initial stage of what the Government hopes will be a longer term agreement with the Aviation Registry Group.
Mr Cargill said the consultants would “lead the process so we can work through Aviation Registry Group and their resources to implement a first-class aviation registry for The Bahamas, and make the jurisdiction attractive for the registration of aircraft and collection of more revenues.
“Aviation Registry Group has a plethora of expertise in the aviation industry,” he added. “Their primary deliverable will be to assist us on implementing the aircraft registry. We are a member state of ICAO, and Aviation Registry Group through their expertise will be helping us to implement regulatory reforms as well.
“This brings The Bahamas world recognition as an aircraft registry location in the first instance. There are enormous revenues to be collected from an aircraft registry, significant fees paid to the Government to have aircraft registered here. We have to think of additional ways to increase the revenue base of The Bahamas, and this is an opportune one we are well suited to achieve.
“It will improve the global profile of The Bahamas. We have a a world-class maritime registry, and now a world-class aircraft registry. It will attract many of the private wealthy jet owners to The Bahamas because they have their aircraft registered here. It gives The Bahamas another leading position.”
An improved Bahamian aircraft registry has been viewed as a value-added complement to the financial services industry’s high-end clients, many of whom own or lease planes. It also fits in with the shipping registry and other efforts to expand and diversify the economy. Virtually all the Bahamas’ international financial centre (IFC) rivals possessing their own aircraft registries.
“We have a deliverable of something tangible by the end of the year. Certainly by 2020 we will have this registry well in place,” Mr Cargill told Tribune Business, when asked how quickly the Government wanted to press forward in tandem with Aviation Registry Group.
He acknowledged, though, that “it’s a much longer project to achieve the global profile we want” - conceding that multiple rival jurisdictions have been in this business for much longer, and The Bahamas must now battle to obtain market share.
Mr Cargill also agreed that The Bahamas needs to establish a register of aircraft mortgages, and sign on to the Cape Town Treaty (Aircraft Convention), both to show it was serious and to complement the aircraft registry’s creation.
The Cape Town Treaty (Aircraft Convention gives financiers and leasing companies confidence that their liens and charges over planes - and plane parts - will be recognised and secure whatever jurisdiction the craft is in.
Bahamas-based companies and residents typically have to pay more when leasing aircraft from US companies because this nation is not a Cape Town Convention signatory, and the owner wants extra compensation for the extra risk.
Jorge Colindres, executive chairman of Aviation Registry Group, said of the deal: “We are thankful for the trust that the Government of Bahamas has on ARG’s expertise and reputation in the industry, and we are looking forward to the cooperation in developing the Bahamas Aviation Regulatory System together with the BCAA into a premier jurisdiction in compliance with the highest aviation industry standards and practices, as we have done with Aruba and San Marino.”