For 30 years, the Isle of Man has been persuading wealthy individuals to place their money in its tax-free offshore banks. Now the independent British dependency in the Irish Sea is attracting their aircraft too, making the M prefix the latest must-have for almost 100 business-jet owners.
The island set up the registry in May 2007 based on a successful similar maritime scheme for "mega" yachts and following the example of other small island statelets such as Bermuda and the Caymans. It allows international owners to register their aircraft in a "neutral" territory, and, although the Isle of Man is not a member of the European Aviation Safety Agency, the registry is EASA-compliant and based largely on the UK's regime. The scheme more than quadrupled its first-year target of 12 registrations, passing the 50-mark by May, and is on target to hit treble figures by the end of the 2008, says Brian Johnson, who joined from the UK Civil Aviation Authority last year as the island's first director of civil aviation.
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Unless owned by a resident, registration is limited to types of 5.7t and above - "King Airs and bigger we don't want very light jets or recreational aircraft" - and the scheme is cost-neutral. The intention, says Johnson, is not to generate a profit directly but to sell island services and "the Isle of Man brand" to wealthy individuals around the world. Owners of M-registered aircraft do not have to live or base their aircraft on the Isle of Man - only around a tenth are residents and some may never even visit. However, the government hopes high net-worth individuals will use local banks, legal and insurance firms, invest in property, and even relocate their business or themselves to the island.
Around 40 of the more than 90 aircraft on the register are new the rest have been transferred from other registers, including the UK. One advantage of the register for the owner not shy of publicity is that specific M registrations - a prefix followed by four characters - can be requested and transferred between aircraft. International financier Jim Mellon registered the first aircraft as M-ELON, while others on the register include M-AGIC, M-YSKY and M-RBIG.
The registry is not the only initiative from the Isle of Man government designed to position the territory, which has a population of 80,000, as a centre for aerospace and aviation services. Two years ago, the Isle of Man aerospace cluster was launched as a way of marketing and encouraging co-operation between the island's 16 aerospace companies, which between them account for more than two-thirds of the 1,200 engineering jobs on the Isle of Man. The biggest employers are Ronaldsway Aircraft - the island's oldest aerospace company is owned by ejection system manufacturer Martin-Baker and RLC Engineering - and GE Aviation, which makes landing gear and actuation systems.
The government is keen to attract more aerospace investment and says the size of the island means ministers and civil servants are much more hands-on than in larger states. "We offer very proactive support and money is not necessarily the barrier to what we can do," says Adrian Moore, manufacturing development manager with the department of trade and industry (DTI). "There is very little we can't facilitate very easily. We can make things happen." Low rates of income tax and virtually zero unemployment (albeit with a consequent higher cost of living than the nearby north-west of England) mean the government can be picky, however, about the type of business it helps. "We have no interest in call centres," says Moore.
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Among the initiatives started as part of the cluster are an apprenticeship scheme where youngsters are able to spend a certain amount of their training at different participating companies before choosing which specific discipline they want to follow. A wider Awareness of Careers in Engineering project promotes engineering careers in schools. With no university, one of the government's aims is to persuade as many graduates as possible to return to the island - something it can only do with the promise of good careers and a quality of life, says Moore.
ESTABLISHING RELATIONSHIPS
The cluster also works closely with the Lancashire-based North West Aerospace Alliance to establish relationships with the region's big manufacturers - Airbus, BAE Systems and Rolls-Royce - and arrange workshare packages among members. "Our pipe dream would be Rolls-Royce coming to us and asking us to build the front end of a Trent," says Moore.
The departure of British Airways Connect regional service two years ago - Flybe took over the routes but transferred engineering to Exeter - has also spawned a small maintenance and aviation services industry at the island's Ronaldsway airport, founded largely by former BA Connect executives and tapping into the trend by airlines to outsource more of their non-core operations. Among the new businesses is Manhattan Aviation Services, which was founded as a recruitment agency supplying contract labour to the maintenance sector, but now offers engineering training in the classroom as well as on-line. Its training centre at the airport's new freeport development was officially opened last month by the Duke of York.
AvioTech was set up by four former BA Connect engineering managers and provides technical support - from maintenance scheduling to record-keeping - to regional airlines, including BA's London City-based Cityflyer and Virgin Nigeria, specialising in BAE Systems and Embraer jets. Managing director Eddie Mulgrew is confident about prospects despite the downturn, as more hard-pressed carriers are looking to hive-off peripheral activities. "Our prime market is people who haven't built the infrastructure or want to downsize to gain efficiencies," he says. "We're on a driven marketing campaign at the moment. While for a lot of people the downturn is a worry, we see it as an opportunity."
He says backing from the Isle of Man government was crucial in helping it launch the business. "The DTI are very good at providing support, particularly in the first year. It's a very pragmatic attitude. It's not often you can go straight to a government minister with a request for some help," he says. "We had a pool of employees who were made redundant on Friday and we put them in a different office on Monday. It was seamless."
In the former BA Connect hangars nearby are two more spin-offs from the regional airline. Formed in March last year, European Aviation Maintenance is a subsidiary of West Air Sweden and maintains 31 BAe ATP twin-props for Greece's Airgo, Nex Jet in Scandinavia and its parent's own Swedish and Luxembourg-based operations - more than half the worldwide fleet. With a staff of 31 engineers and six technicians, the business carries out heavy maintenance as well as support to line operations throughout Europe.
FULL OF PRAISE
EAM director Chris Astley is also full of praise for the government which stepped in to secure the hangar when BA Connect pulled out. "The place would have been boarded up otherwise," he says. Like AvioTech's Mulgrew, Astley believes the new business can shrug off the worst of any downturn. "The ATP is largely used in the parcel market, and that market is increasing as people buy on-line," he says. "We are very cautious, but the future is not as bleak for us as it is for other companies."
In the hangar next door to EAM, start-up Castle Aviation has taken a different approach, focusing on private aircraft. Founded by another former BA Connect engineer, Anura Withanage, Castle Aviation has maintenance contracts with owners of 15 aircraft based on the island, many of which are on the new register, including an Embraer Legacy 600. "We undertook the first light aircraft to be registered on the Isle of Man register and have since completed numerous others," says Withanage.
Until the 1970s, the Isle of Man was a sleepy tourist destination, which revved into to life each summer for the TT motorcycle race. Its financial sector as well as other government-backed areas such as movies have transformed the island's fortunes. Aviation services and aerospace have become the latest sectors the government believes can bolster an economy not immune to rumblings in the global financial system.
Source: Flight International
