Isle of Man: Isle Of Man Aircraft Register

The Isle of Man Aircraft Register became operational on 1st May 2007. Within two days of the launch of the register, three Cessna Citation Jets had been registered in the Isle of Man and it is anticipated that there will be a total of seven aircraft on the Isle of Man register within the first two months of its operation.

In order to create the Isle of Man Aircraft Register a UK Order in Council has been necessary to apply parts of the UK Civil Aviation Act 1982 to the Isle of Man. The reason for this is because the United Kingdom is the contracting state party to the Chicago Convention which is ultimately responsible to the International Civil Aviation Organisation (ICAO) for ensuring that the Isle of Man complies with the provisions of the Chicago Convention.

The Air Navigation (Isle of Man) Order 2007 (a UK Statutory Instrument which came into force on 1st May 2007) (the 2007 Order) is the principle legislation enabling the Isle of Man to establish its own Aircraft Register. The 2007 Order makes provision for the Isle of Man corresponding to certain provisions of the UK Air Navigation Order 2005 (SI 2005/1970) and contains rules relating to the registration, marking, airworthiness, equipment, manning, operation, movement and safety of aircraft in the Isle of Man and the licensing and welfare of flight crew of aircraft registered in the Isle of Man.

In addition, a number of orders have been made pursuant to the Isle of Man Airports and Civil Aviation Act 1987, which apply UK primary and subordinate legislation to the Island, subject to any necessary exceptions, adaptations and modifications. Examples of some of the UK subordinate legislation which has been applied to the Island include:

• Mortgaging of Aircraft Order 1972 (as amended);
• Rules of the Air Regulations 1996 (as amended);
• Aeroplane Noise Regulations 1999 (as amended);
• Air Navigation (Environmental Standards) Order 2002;
• Air Navigation (Dangerous Goods) Regulations 2002;
• Air Navigation Order 2005 (as amended);
• Civil Aviation (Insurance) Regulations 2005;
• Air Navigation (General) Regulations 2006;
• Civil Aviation (Safety of Third Country Aircraft) Regulations 2006;
• Civil Aviation (Investigation of Air Accidents and Incidents) Regulations 1996;
• Civil Aviation (Procedure) Regulations 1991;
• Civil Aviation (Births, Deaths and Missing Persons) Regulations 1948 (as amended).

The following categories of persons (Qualified Persons) are qualified to hold a legal or beneficial interest by way of ownership in an aircraft registered in the Isle of Man:

• the Crown;
• Commonwealth citizens (the Commonwealth means the UK, the Isle of Man, the Channel Islands, the countries mentioned in schedule 3 to the British Nationality Act 1981 and all other territories forming part of Her Majesty’s dominions or in which Her Majesty has jurisdiction);
• nationals of any EEA State;
• British protected persons;
• bodies incorporated in some part of the Commonwealth and having their principal place of business in any part of the Commonwealth; and
• undertakings formed in accordance with the law of an EEA State and having their registered office, central administration or principal place of business within the European Economic Area.

In addition, if an aircraft is chartered by demise to a Qualified Person, the aircraft may still be registered in the Isle of Man in the name of the charterer by demise (notwithstanding that an unqualified person is entitled as owner to a legal or beneficial interest in the aircraft) if the Isle of Man Aircraft Registry is satisfied that the aircraft may otherwise be properly registered in the Isle of Man. Such an aircraft would only remain registered during the continuation of the charter period.

Only private and corporate aircraft can be registered on the Isle of Man Aircraft Register. Aircraft registered in the Isle of Man are not able to fly for the purposes of public transport or aerial work.

Subject to a limited number of exceptions:

• aerial work means any purpose (other than public transport) for which an aircraft is flown if valuable consideration is given or promised in respect of the flight or the purpose of the flight; and
• an aircraft in flight will generally be deemed to fly for the purpose of public transport if valuable consideration is given or promised for the carriage of passengers or cargo in the aircraft on that flight or if any passengers or cargo are carried gratuitously in the aircraft on that flight by an air transport undertaking (being an undertaking whose business includes the undertaking of flights for the purpose of public transport of passengers or cargo).

One important exception from a flight constituting a flight for the purpose of public transport is that any valuable consideration given or promised in respect of a flight or the purpose of a flight by one company to another company which is its holding company, its subsidiary or another subsidiary of the same holding company, will be disregarded.

There are no limits whatsoever on the weight of aircraft which can be registered on the Isle of Man register.

An aircraft registered in the Isle of Man must bear the nationality mark "M" followed by the registration mark which will be a group of four capital letters assigned by the Isle of Man Aircraft Registry on the registration of the aircraft.

It may be possible for an applicant to request an out-of-sequence registration mark, subject to availability and the payment of an additional fee.

The 2007 Order prohibits an aircraft from flying unless a certificate of airworthiness, issued or rendered valid under the law of the country in which the aircraft is registered or the State of the operator, is in force in respect of the aircraft.

The Isle of Man Aircraft Registry will only issue a certificate of airworthiness in respect of an aircraft registered in the Isle of Man if it is satisfied that the aircraft is fit to fly having regard to:

• the design, construction, workmanship and materials of the aircraft and of any equipment carried in the aircraft which it considers necessary for the airworthiness of the aircraft; and
• the results of flying trials, and such other tests of the aircraft as it may require.

Every certificate of airworthiness in respect of an aircraft registered in the Isle of Man will specify the category "Private" and will be subject to the condition that the aircraft must only be flown for the purposes specified in the certificate (which will not include public transport or aerial work).

Ongoing maintenance of Aircraft registered in the Isle of Man

An aircraft registered in the Isle of Man in respect of which a certificate of airworthiness is in force is not permitted to fly unless the aircraft (including its engines), together with its equipment and radio station, is maintained in accordance with a maintenance schedule approved by the Aircraft Registry in relation to that aircraft.

A person is prohibited from acting as a member of the flight crew of an aircraft registered in the Isle of Man unless he is the holder of an appropriate licence which has been rendered valid under the 2007 Order.

A number of licences will be deemed to be rendered valid under the 2007 Order, including a Joint Aviation Authorities licence, certain licences granted under the law of a State which is a party to the Chicago Convention and certain licences granted under the law of a relevant overseas territory (being any colony and any country or place outside Her Majesty’s dominions in which for the time being Her Majesty has jurisdiction).

In addition, the Aircraft Registry may, subject to such conditions as it thinks fit, issue a certificate of validation of certain flight crew licences issued by an NAA, subject to the type ratings and privileges attached to the licence by the issuing authority, for the purpose of authorising the holder to act as a member of the flight crew of an aircraft registered in the Isle of Man.

The UK Mortgaging of Aircraft Order 1972 (as amended) has been applied to the Isle of Man (subject to some slight modifications and adaptations) and therefore the law relating to the registration and priority of mortgages over aircraft registered in the Isle of Man closely follows the English position.

The mortgage of an aircraft registered in the Isle of Man can extend to any store of spare parts for that aircraft, however, it will not include a mortgage created as a floating charge. There is no prescribed statutory form of mortgage which is required to be used in respect of an Isle of Man registered aircraft.

A mortgagee of an aircraft registered in the Isle of Man is able to register its mortgage in the Isle of Man Register of Aircraft Mortgages. The procedure for this is very straightforward and simply requires an application to be made to the Aircraft Registry in the prescribed form. The application must be made by or on behalf of the mortgagee and must be accompanied by a copy of the mortgage certified by the applicant as being a true copy. The charge for registering an aircraft mortgage is £210.

In addition, a procedure is available whereby a notice of intention to make an application to enter a contemplated mortgage of an aircraft in the Register of Aircraft Mortgages can be entered in the register (a Priority Notice). Applications to enter a Priority Notice in the register must be made to the Aircraft Registry in the prescribed form by or on behalf of the prospective mortgagee. The charge for registering a Priority Notice is £40.

Subject to a number of transitional provisions, a registered aircraft mortgage is given statutory priority over any subsequently registered aircraft mortgages and unregistered mortgages. Where a Priority Notice has been entered in the register and the contemplated mortgage referred to in the Priority Notice is made and entered in the register within 14 days thereafter, that mortgage is deemed to have priority from the time when the Priority Notice was registered.

It should however be noted that a registered aircraft mortgage will not be given priority over any possessory lien in respect of work done on the aircraft on the express or implied authority of any persons lawfully entitled to possession of the aircraft or over any right to detain the aircraft under any UK Act of Parliament or Isle of Man Act of Tynwald.

The fees payable for the registration of an aircraft and for the issue of a certificate of airworthiness are based upon the maximum total weight of the aircraft.

The fee payable for registering an aircraft with a maximum total weight exceeding 5,700kg is £110 and the fee payable for registering an aircraft with a maximum total weight of 5,700kg or less is £55.

The fee payable for the initial issue of a certificate of airworthiness is £75 for each 500kg or part thereof of the maximum total weight of the aircraft and the fee payable for the renewal of a certificate of airworthiness is £40 for each 500kg or part thereof.

In addition, the Aircraft Registry will charge on a time spent basis for the time taken to carry out any investigations and inspections reasonably necessary for the registration of the aircraft and the issue of the certificate of airworthiness.

• The Isle of Man Aircraft Registry is a relatively small and efficient unit which enables the registry to offer a high quality of personal service, with aircraft owners being able to readily contact senior staff to answer queries and deal with any issues which may arise.
• Geographically, the Isle of Man is located within the centre of Europe and is within the same time zone as the UK and never more than one or two hours different from all other European countries.
• The Isle of Man offers a favourable taxation regime. In April 2006 the Isle of Man introduced a standard zero rate of corporate income tax. This means that the income of Isle of Man tax resident companies is taxed at 0% in the Isle of Man. In addition, there is no capital taxation in the Isle of Man and no stamp duty or taxes on wealth.
• The Isle of Man has a high quality and stable political, legal, fiscal and regulatory environment and has received an AAA credit rating from both Standard and Poor’s and Moody’s credit rating agencies.
• The quality of the Island’s professional infrastructure. There are many lawyers, accountants, administrators and banks on the Island who have the expertise and experience to deal with aircraft financing.
• An aircraft registered in the Isle of Man has a neutral registration prefix.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.