Annual reports laid in the House of Assembly show how the Bermuda Civil Aviation Authority weathered the storm in the face of potentially crippling revenue losses as a result of international sanctions in 2022.

Russia’s invasion of Ukraine and the subsequent restrictions imposed on the Russian civil aviation industry resulted in the removal of over 700 aircraft from the Bermuda Aircraft Registry.

Kim Wilkerson, the Attorney-General and Minister of Justice, who served as chairwoman of the board of the authority, commended the BCAA whom she noted “persevered and persisted with efforts to mitigate the effects” of lost income as a result of the sanctions.

Ms Wilkerson’s comments were included in the BCAA’s 2023/24 Annual Report.

That report, as well as reports for 2021/22 and 2022/23, were laid in Parliament on Friday.

In the 2023/24 Annual Report, Ms Wilkerson said the consequences of the sanctions had been “significant”.

In January 2020, there were 900 aircraft on the aircraft registry, a substantial source of revenue to the Bermuda Government.

In March 2022, David Burt, the Premier and Minister of Finance, told a post-Budget press conference that approximately 740 were utilised by Russian air operators. The majority, he said, were owned by leasing companies based in Ireland.

The BCAA said in May 2023 that Bermuda’s total registrations were down to 644, including some 480 that were in Russia.

Since the start of the war in Ukraine, BCAA’s revenue had dropped by approximately 85 per cent, it said.

Mr Burt reported to Parliament in July 2023 that “the $18 million not received from the aircraft registry was due to the war in Ukraine”.

In the BCAA’s 2021/22 Annual Report, Ms Wilkerson said the war “brought a new set of challenges to the authority as international sanctions forced the grounding of the majority of aircraft on the Bermuda registry”.

She said at the time that the subsequent lost revenues resulted in the BCAA having to contend with cost reductions, redundancies and negotiations with the Government regarding the organisation’s budget.

In the 2022/23 Annual Report, she said it was the first year in the BCAA’s history that the organisation did not turn a profit.

Thomas Dunstan, the BCAA’s director general, said despite the conflict in Ukraine continued impact on the authority’s revenues for the 2023/24 year, the aviation body recorded a favourable financial result.

He said: “The loss was not as great as we had originally anticipated thanks to the extraordinary efforts our team made to implement cost-cutting measures while also seeking out alternative revenue sources.”

One such measure was in April 2023 when the BCAA introduced a registry fee for aircraft without an active certificate of airworthiness, such as those on the ground in Russia.

“The income obtained through this initiative helped off-set some of our losses from the year,” he said.

In the 2024/23 Annual Report, Ms Wilkerson said the BCAA focused on opportunities to get back to business development, an area of its operations that was severely hampered during the pandemic.

This included participating in a number of key industry events around the world where team members networked and spread the word about the BCAA’s value proposition.

She said the board was encouraged by the initiatives and she hailed the efforts of Kyle James, business development manager, whom she said became the face of the BCAA globally.

That year, she said the board was actively working with the management team of the BCAA to explore cost-saving measures to help off-set the losses associated with the grounding of Russian aircraft.

This included the reduction of the BCAA’s office space and she noted that the body was “diligently seeking out additional efficiencies”.

Bermuda’s Aircraft Registry has earned a solid reputation internationally for being safe and well-regulated, the BCAA said on its website.

The registry includes a mix of private and commercial aircraft operated on a Bermuda Air Operator’s Certificate called AOC or under Article 83 Agreements of the Convention on International Civil Aviation.

Meanwhile, Mr Dunstan said during the 2023/24 fiscal year, the BCAA broadened its business development strategy by successfully negotiating and signing memoranda of understanding with Hadid International Services, a leading provider of aviation support and fixed-base operator services headquartered in Dubai, and French firm Bureau Veritas.

He said the two entities are aerospace consultants that the authority has relied on in the past to carry out safety inspections.

“We look forward to embarking on a valued relationship with Hadid and extending our trusted partnership with Bureau Veritas as we look to expand into new markets,” he added.