The Tribune

By NEIL HARTNELL

Tribune Business Editor

ESTABLISHING a Bahamian international aircraft registry would earn this nation "well into the millions", an aviation legal expert has told Tribune Business, disclosing that a "conservative" study several years ago had estimated it could produce $18-$20 million in annual registration fees alone.

Llewellyn Boyer-Cartwright, a Callenders & Co senior associate and first Bahamian admitted to the Lawyer Pilots Bar Association, suggested that the now-dated numbers from that study on a Bahamian aircraft registry's potential could probably be increased by 10-15 per cent to conform with the current reality.

Expressing hope that the Christie administration would be responsive to the aircraft registry proposal, given its potential income and ability to diversify the Bahamian aviation sector via various spin-off opportunities, Mr Boyer-Cartwright said the concept was in keeping with the need for "new and innovative ideas" to revive the economy.

Pointing out that the Bahamas could not keep relying on the same economic drivers "year after year after year", he added that an aircraft registry would complement - and fit well with - industries such as financial services, given that many of the latter's client base either owned themselves, or regularly leased, aircraft.

Colleagues at Bahamas-based financial institutions, Mr Boyer-Cartwright said, had received several inquiries over the years about aircraft registration, leasing and financing, but knew no one they could approach. As a result, the Bahamas had lost potential business, these institutions now handling such inquiries through their Swiss head offices.

Having dug out the last attempt to put actual figures to the potential of a Bahamian aircraft registry, Mr Boyer-Cartwright told Tribune Business: "I would increase the numbers by 10-15 per cent.

"We were looking back then at $18-$20 million in terms of annual revenues. This didn't even include other spin-offs in terms of the development of capital markets and international recognition. It was being quite conservative at the time. We can safely say the potential's in the millions, just the revenue generation alone. That speaks for itself."

He pointed to the success of Aruba, which he described as "20 years ahead of us". The small Caribbean island, not as well known as the Bahamas when it came to international business, accounts for 10 per cent all aircraft registered on the Irish-based international register.

Emphasising that the Bahamas could "catch up and surpass" regional rivals, Mr Boyer-Cartwright said: "Obviously, it's worth something if they're doing so well."

Factors that will aid the Bahamas in this effort, he added, were its geographical location and US proximity, together with the redeveloped Lynden Pindling International Airport (LPIA) that was taking this nation "definitely in the right direction".

Mr Boyer-Cartwright said he and other proponents of the Bahamas aircraft registry proposal were aiming to meet with the new minister of transport and aviation, Glenys Hanna-Martin, on the issue.

"Hopefully this government will be receptive, and we need to push forward with it," he told this newspaper. "We will know soon enough whether they're keen.

"I think with the economy the way it is, we have to come up with new and innovative ideas. I had lunch today [Friday] on completely different matters with colleagues from the financial sector, and they're about to launch a new product.

"We can't keep relying on the same thing year after year after year; we have to adapt and change with the time. This is what an offshore bank is doing; they're about to launch a new product. This is the same thing with the aircraft registry, on different lines but in a bigger way."

Pointing to the potential for an aircraft registry to generate financing and leasing spin-offs, Mr Boyer-Cartwright said of his banking contacts: "They have had inquiries over the years, and have wished they knew somebody to pass them on to for leasing and financing.

"They don't do any of that here. Their head office in Switzerland does it. That's another aspect financial institutions can get into - providing financing for aircraft owners."

To establish a Bahamian international aircraft registry, Mr Boyer-Cartwright said this nation needed to sign on to the Cape Town Treaty (Aircraft Convention). This would give the industry confidence in the Bahamas, with financiers and leasing companies knowing their liens and charges over planes - and plane parts - would be recognised and secure wherever the craft was in the world.

"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," said Mr Boyer-Cartwright.

"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 full European Union (EU), India, China and Aruba - all countries that would be competitive international aircraft registry jurisdictions - are signatories.

"Not being a signatory to the Cape Town Convention puts us at a great disadvantage," said Mr Boyer-Cartwright, "and 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."

Another necessary step, Mr Boyer-Cartwright said, was for the Bahamas to establish a body or framework for an aircraft registry, and create an Aviation Authority. This, he added, should include representatives from the financial, legal and Civil Aviation communities.

And he also called for the Government to remove the 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," said Mr Boyer-Cartwright.

"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 added: "The establishment of an international Aircraft Registry with standards that meet or exceed those of ICAO, the regulatory body (International Civil Aviation Organisation) could open countless jobs and entrepreneurial opportunities."