CTC bond

[102roadlegal]

Can someone explain how the CTC bond works ?
I understand that approx £63000 has to be guaranteed from the outset and payments are taken at say monthly intervals.
If all goes well and a candidate finds employent, 7 years of service are required.
Is that how it works ?

[nevilinio]

The 63k "bond" is basically a loan. When you pass through selection at CTC, you were originally put in touch with HSBC or Natwest where you would arrange a loan or a bond. (maybe a little different now as apparently HSBC and Natwest have ceased offering these loans out). Wings cadets wouldn't require security, iCP would require security as CTC wont guarantee the first £30k or so.

I can only speak from my own experience as I am going the iCP route.

The payments are broken up into three payments. The first is a deposit of about £28k, then another payment 4 months later of about £23k then a final payment at the end of one year of ~£10k. The seven years is basically the repayment period where you'll be paying back about a grand a month. :ok:

[nevilinio]

Oh and you get a 2 year "moratorium period". Basically you don't pay anything back during the training, only after 6 months of finishing your advanced phase, which is ~2 years from when you commence training.

[102roadlegal]

So the advantage is that you get the cash provided up front, then pay back over the following years in employent ..?
If you were lucky enough to self finance that amount, eg house sale or whatever, is that an option ? That would mean no deductions each month as I see it

[flightless_bird]

I don't have the exact figures but for non-iCP cadets you make smaller more regular payments (monthly I think for about 18 months) to put up your initial 'bond'. (Rather than 'bond' I prefer to use the word loan as that describes it more accurately.) Then when you start employment proper (not the six months of line training but when the airline decides to employ you after this training period) then you use a portion of your salary to pay back your loan. This would go to whomever you have the loan with: the bank, your parents, a rich benefactor. If you have self-funded your loan then by definition you do not have a loan so you would not have to deduct anything out of your salary to pay this back.

Also note that some airlines (easyJet being one I believe) have a scheme where you do not pay tax on the portion of your salary which would normally be used to pay back your loan. It is generally accepted that (depending on the interest rate obviously) you need to pay about £1000 a month for seven years to write off the loan so this is how long EZY will give you a tax-free component of your salary for and where the seven years of being 'bonded' comes from.

In actual fact you are not 'bonded' to an airline for seven years though because you could move to another airline and get another job paying exactly the same (bar the fact that you would now be paying tax on your entire salary rather than all but £12,000 of it) and you would just use a portion of your new salary to continue paying off your loan.

[102roadlegal]

Thanks for your reply. Lastly, any thoughts on how CTC compares with other training organisations ? Their employement stats via the Cadet scheme appear impressive ?

[flightless_bird]

Thanks for your reply. Lastly, any thoughts on how CTC compares with other training organisations ? Their employement stats via the Cadet scheme appear impressive ?

That's a little hard to answer as unless you are a modular cadet and move around you usually only train at one place so have no basis for comparison. Try asking it on 'The CTC Wings (Cadets) Thread - Part 2' and see if you get more of an answer though.