By Filippo Arcaleni & Richard Deschrijver, Inarilaw – © Shutterstock – Inarilaw
In recent decades, Malta has established itself as one of Europe’s most respected aviation jurisdictions. Through consistent investment, forward-looking legislation, and strong collaboration between government and the industry, the island has built a modern framework that attracts airlines, lessors, financiers, and service providers from around the world.
Malta’s Aviation Legal Framework
At the core of Malta’s success in aviation lies a comprehensive legal system that provides clarity and certainty to stakeholders. The Aircraft Registration Act, Chapter 503 of the Laws of Malta, is a cornerstone of this framework, regulating aircraft ownership, operation, and financing. It incorporates the Cape Town Convention (and its Aircraft Protocol), offering protection for financiers and lessors through recognition of international interests and streamlined enforcement of repossession rights.
This law allows:
– Registration of aircraft under construction
– Fractional ownership of aircraft
– Registration of foreign-owned aircraft, provided operational or leasing conditions are met
A recent legal development, the Air Navigation Act, Chapter 641 of the Laws of Malta (effective 2024), further strengthens Malta’s regulatory regime, regulating aircraft navigation within Maltese airspace and ensuring compliance with EU and international aviation standards.
The Role of the National Aircraft Register
The Maltese National Aircraft Register, maintained by the Civil Aviation Directorate of Transport Malta, is central to the system. It provides a secure and efficient registration system for ownership and lease interests, recording ownership, operator, and mortgagee interests. Crucially, it supports Irrevocable Deregistration and Export Request Authorisations (IDERAs) under the Cape Town Convention, giving lessors/financiers the right to de-register and export aircraft swiftly in case of default—a significant creditor protection tool.
Security Interests
Malta’s aviation legislation offers a robust framework for security interests, ensuring clarity and protection for financiers, lessors, and operators. Under the Aircraft Registration Act:
– Aircraft are a distinct class of movable assets, separate from owners’ other property
– In bankruptcy or insolvency, claims tied to the aircraft take precedence over other debts
– Aircraft (or shares) can serve as security for debts
– Provides registration and ranking of mortgages, privileges, and other security interests
Certain privileges arise automatically by law (e.g., judicial costs, civil aviation fees, crew wages, repairs, salvage operations), while others (taxes and duties, government claims) require registration in the International Registry under the Cape Town Convention. Together, these create a clear hierarchy of claims and allow efficient enforcement for national and international creditors.
Strengthened Creditor Protection
Malta’s ratification of the Cape Town Convention and its Aircraft Protocol further enhances creditor protection and legal certainty. Registered international interests enjoy priority over unregistered claims and grant creditors remedies in case of default, including possession, sale, or lease of the aircraft without court approval. IDERAs enable lenders to deregister and repossess aircraft swiftly—typically within five working days. Mortgages registered in Malta are enforceable without judicial proceedings, and foreign mortgages are recognized under specific conditions.
By combining domestic security provisions with international enforcement standards, Malta offers one of Europe’s most creditor-friendly aviation finance regimes, reinforcing its position as a trusted jurisdiction for aircraft ownership, leasing, and financing.
