Alex
As to the contract you mention, the contractor, who we will call flight school D, emptied the bottom of its holding pool in the direction of the poor airline, and gossip has it that they were even phoning up hopefuls who had been thrown out of the holding pool two years before in an effort to fill slots. I doubt that really helps the airline.
That's as I understand it. My rhetorical question at the end was tongue in cheek however concerning RYR, I know of particularly weak candidates who have been recommended by integrated ATO's in favour of their higher performing peers (with respect to attitude, motivation and ability). Your appraisal seems to confirm what I have long suspected, which is that School A possibly streams the stronger candidates for airline B recruitment with a view to return business whilst those weaker but with an ability to pay for a type rating are promoted for Airline C interviews ahead of potentially better candidates to help 'drain the swamp'. Airline C is never likely to contract school A or anyone else for initial training so the only risk for the school is that Airline C will seek throughput from other schools if the quality is consistently dire.
KayPam
But at the end of the day they will always know that only a CAA examiner can give a CPL to a candidate.
Would that be a CAA approved FE CPL who is paid for through or worse still, employed by the same school that conducted the candidates training? Impartiality assured, no doubt.