Wednesday, 15 March 2017

The Registry that Never Took Off

The Parting of the Ways

In 2013, it was envisaged that the Channel Islands of Guernsey and Jersey would create and launch an aircraft registry as a joint venture.

Jersey withdrew from the process in the autumn of 2013 and decided to launch its own aircraft registry during 2014 branded as the ‘ZJ-‘ Jersey Aircraft Registry. Guernsey launched its aircraft registry in December, 2013 branded as the ‘2-REG Channel Islands Aircraft Registry’.

That decision was made by Senator A.J.H. Maclean - The Minister for Economic Development at the time. Jersey decided, in the words of the song, to say "I did it my way".

Giving evident to Scrutiny, Chief Officer Mike King said:

“We are where we are now because we had extremely clear and unambiguous legal advice that the option that we put forward is the option that provides for commercial advantage to be derived by both Islands from a common Channel Island’s registry function. That is not a position, as you can see from the latest communication between ourselves and C. and E., that has been accepted by our colleagues in Guernsey and therefore, regrettably, the Minister has made the decision that we would go our own way.”

Now Jersey has 2 aircraft registered, Guernsey has 147, and the Isle of Man has 932!

What a clever decision to go it alone by the Minister!

Senator Maclean’s Brave New World

The news in 2014...

Jersey has announced that it will formerly launch an aircraft registry in 2014 just three days before Guernsey, its neighbouring Channel Island, registers its first aircraft. Brian Johnson, a consultant at law firm Appleby and the first Director of Civil Aviation for the Isle of Man, has agreed to advise Jersey. Johnson, a veteran of the UK Civil Aviation Authority, was the first employee of the Isle of Man Aircraft Registry and worked hard to make it a success. The Isle of Man has registered more than 600 aircraft.

“It is fantastic news that Brian with his many years of experience in the aviation industry, and especially in the establishment of another very successful registry, Jersey will have an individual with unparalleled expertise to advise on this exciting project,” said Senator Alan Maclean, Jersey’s Minister for Economic Development.”

So why is Mr Johnson also very quiet about matters now? He was vocal about his part in the success of the Isle of Man! But somehow his “unparalleled expertise” does not seem to have provided Jersey with a similar success story. Could he come out of the shadows and at least explain why?

“This is an exciting opportunity for Jersey which will form an incredibly strong additional element to our inward investment strategy. Thanks to its business friendly environment, simple and attractive tax framework and world class professional and financial services infrastructure, Jersey already offers a compelling proposition to individuals and companies looking to relocate or expand their businesses,” said Senator Maclean. “The launch of the Jersey Aircraft Registry will undoubtedly add to Jersey’s overall offering and provide local businesses with significant opportunities, particularly in the fiduciary, legal and financial services arenas.”

Senator Maclean, it should be noted, has recently joined an order of Trappist Monks who keep silence about past shortcomings. A "compelling proposition" failed to compel, and he evidently does not want to revisit past failures, as goodness knows there are enough of them from his time as Minister for Economic Development, and the public might just be leary about re-electing him if they added them up.

The Farnham Air Show

Remember the news that Jersey would have its registry by 2014 – according to Senator Maclean it would “launch an aircraft registry in 2014”. As you can imagine when the States do anything, it takes longer than expected, so it was not until November 2015 that it was launched. As might be expected, the new Minister for Economic Development, Senator Lyndon Farnham, decided to grab a bit of the glory at its launch.

The Minister for Economic Development, Senator Lyndon Farnham, said: “This new registry will be a fantastic opportunity for the Island. We have created the Jersey Aircraft Registry for local service providers to register aircraft, aircraft mortgages and, uniquely, commercial aircraft engine mortgages for clients. This will enable local businesses to broaden their offerings, which already includes the registration of companies, ships and other security interests. Revenue will be created through the fees charged by the Registry, and we hope to see new jobs created in financial, fiduciary and legal services. There is also a longer-term goal of creating roles in technical positions, as we see maintenance and management organisations relocating to Jersey.”

Geoff Cook, CEO of Jersey Finance, was also eager to get in on the act, and said:: “It is always encouraging to see new and exciting opportunities being created for the Island’s finance, fiduciary and legal services. The Jersey Aircraft Registry will certainly add to the island’s overall offering.”

Meanwhile, Chris Kelleher, in charge of Business Development for the JAR stated that: “… the JAR will adopt a competitive scheme of charges and provide customers with an impressive registration turnaround”.

And in case you’ve forgot about Brian Johnson, he was still about, and basking in reflected glory:

Appleby assisted with the establishment of the JAR by advising the States of Jersey on the structure and operation of the registry. Brian Johnson, Director of Operations for Appleby Aviation who also helped establish the successful Isle of Man aircraft registry, said: “We are very proud to have assisted with the establishment of the JAR which we see as an exciting new addition to Jersey’s offering as a highly respected and well-established financial services centre. The JAR will provide the perfect platform for customers around the world seeking an efficient registration of private and corporate high-value jets and helicopters”.

Presumably, they got the bulk of the sum for Specialist Advice and Consultancy which came at a cost of £177,000. Perhaps Appleby Aviation can explain why it failed to be such a "perfect platform", as we have certainly paid them enough in setting it up.

Murray, the Bringer of Bad News

Now the whole thing has gone pear-shaped, Senator Maclean, Brian Johnson, Chris Kelleher (he of the “ impressive registration turnaround”), and Senator Farnham have all joined the Trappist Order of Monks and are keeping silent..

So much for the Ministers, the business case civil servant, the Isle of Man expert, and of course the gung-ho approach of going alone...

Lyndon Farnham, as with the Ice Rink fiasco, has the perfect solution: get out your Assistant Minister to deliver the bad news, and so Murray is again in the limelight. Who better to freeze spending that the ice rink Assistant Minister?

Despite the poor performance of Jersey's registry, the politician in charge of it insists it can be made to work, and they can make back the money spent on setting it up. Assistant Economic Development Minister, Deputy Murray Norton, says he has frozen spending on the project and created a new team of officers to help to create a plan to make the register more successful.

Quite how it is possible to freeze spending, and create a new team is beyond me. I would have thought the new team would have to be paid, and spending would continue. Or are the new team doing this for free? I can understand that fixed regular costs - payments to marketing for instance - can be suspended, but in my accountant's book, "frozen spending" means no spending.

Deputy Murray Norton also said that a "radical" overhaul of the £800,000 project could still make it even more successful than originally predicted.

As the original prediction was way off its mark, it would be truly amazing if this can be done!

Actually, despite the promotional fluff from the Senators and associated individuals, when they spoke to scrutiny in 2013, it was established that even the IOM one took years before it could turn a profit. Jersey was hoping to break even at best for many years.

In the meantime,. Murray has committed himself to an updated business plan to be revealed by the end of May or June this year. Watch the skies! And please let us have the cost of producing this business plan, in terms of time and money, so we can see how much that has cost.

And in conclusion...

My correspondent Adam Gardiner has this to say:

My solution is close it down before it costs us another shed load of money - take it on the chin once more and accept that the States frittered away another £800k on a pie-in-the-sky idea….just like the Hollywood blockbuster that never was, the software company that never was, and subsidising three other businesses who keep a token office in Jersey whilst the real value of their enterprise is enjoyed by Chinese manufacturing and wealth management companies in the Cayman Islands.

While I will always subscribe to the motto ‘he who dares wins’ there is also an adage which says ‘ a fool and his money are soon parted’

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