Malta is preparing to introduce a streamlined regime for aircraft financial leasing, hoping to reduce administrative barriers for lessors and strengthening the country's position as an aviation finance jurisdiction.

The proposed framework is expected to introduce a notification-based regime for lessors as an alternative to Malta's existing full licensing requirements.

While regulatory oversight would remain in place, the changes would lower the administrative burden associated with establishing leasing operations in Malta.

The development formed a central part of a Malta Business Network event held this week, during which AeroItalia Vice President Marco Carcioffo discussed the mechanics and economics of aircraft leasing alongside Nicholas Valenzia, Partner at Mamo TCV Advocates. The event was sponsored by the latter.

Malta has spent years developing its aviation offering, building a cluster encompassing legal and corporate services, financial institutions and other specialist service providers.

The proposed regime represents a further refinement of that offering, potentially reducing the entry friction faced by lessors considering Malta as a jurisdiction while retaining the licensing route for businesses that require it.

During the event, Dr Valenzia highlighted the importance of understanding the structures behind aircraft leasing as Malta competes for further aviation finance business.

Dr Valenzia heads Mamo TCV's Shipping and Aviation Departments, focusing particularly on asset management and finance. His experience includes vessel, superyacht and aircraft ownership and operational structures, as well as coordinating vessel and aircraft repossession procedures on behalf of international credit institutions.

Mr Carcioffo, meanwhile, offered an airline operator's perspective on the sector, explaining the economics underpinning aircraft leasing.

One of the fundamental challenges is depreciation: aircraft lose value through their operation, meaning a leasing company recovering an aircraft following an airline failure may receive an asset worth materially less than when it was initially leased.

That deterioration in value is therefore incorporated into leasing agreements and influences the terms under which airlines can secure aircraft.

Mr Carcioffo also discussed the distinction between structures such as operating dry leases and financing dry leases, where commercial and residual-value risks are allocated differently.

AeroItalia itself was able to capitalise on unusual conditions in the Italian aviation market following the collapse of competing carriers.

The airline, founded in 2022, was established partly to absorb branches, offices, employees and aircraft from Italian airlines that had failed around that period.

The collapse of those operators also resulted in unutilised aircraft becoming available on favourable terms, providing AeroItalia with an opportunity that Mr Carcioffo noted is relatively uncommon in the industry.

The airline has since expanded to serve 26 airports, including 22 in Italy, and operates 43 routes connecting Italy with European destinations. It reached three million tickets sold in 2025.

For Malta, the proposed changes to its aircraft leasing framework come as the jurisdiction continues to develop the infrastructure and regulatory environment required to compete for international aviation finance business.