how much will it cost?
Hi All.
I have been doing some thinking around the financial implications of the CTC McAlpine cadet course.
Here are my thoughts:
Much of the chat around the cost of the scheme focuses on the £60k loan/bond, but I think some people are missing the point.
This amount is only going to become relevant if you leave/fail the course or don't get a job at the end.
Admittedly these are important factors but let us for the purposes of this argument consider that everything goes well and you get into the right hand seat with Easyjet. In this case the PARAMOUNT issue is what you get paid.
You can consider the loan, bond and repayments (from EJ to cadet and consequently from cadet to the bank) as an elaborate financing method which doesn't directly affect the cadet (the £1000pcm will roughly equal the loan repayment).
So assuming that a cadet takes the loan, gets through the course, doesn't spend too much time in the holding pool and gets taken on by EJ (with the bond) then the net affect to that cadet is as if the training has been paid for.....HOWEVER, the cadet now, obviously, gets a reduced salary at EJ. Not something that many people have made reference too - I’m surprised!
Viewed from this angle it is exactly like the BA scheme of years ago. The difference is in the bonding. BA would ask for money back if you left early, whereas easyjet will just retain the remainder of the bond they haven't repayed you.
Now, BA took £30k out of salary over 5 years. This was generous.
I think traditionally most airlines have taken £60 out - or a proportion of this.
bmi was £30k like BA, but required £15k up front (of course this £15k is from net earnings so equates to more than £45k out of salary - closer to £51k)
I believe Britannia asks for £15k up front and then takes £45k out of salary. Again because the £15k has to be found from net earnings (and potentially a loan) then this is not as beneficial to the cadet as taking the £60k out of salary.
But in any case £60k in some format seems to be the "figure" which seems the norm.
Now, in effect, EJ doesn't ask for any money up front, (based on the assumption of getting the job etc) and all the costs are taken from salary across 7 years
Looking at their website, a first officer starts on £31,789. Those who graduate from the cadet scheme start on £17,766. That is a reduction of £14,023!
Similarly, for senior first officer, cadet starting: £24,716, normal: £39,023
Captain. cadet: £48,000, normal: £64,363
So it seems that the reduction stays similar for senior first officer but if you make captain while still on cadet scale (quite likely at EJ) then the reduction is £16,363.
This all means that across 7 years you end up paying AT LEAST £98k back!! Perhaps as much as £110k if you make captain early.
For me this is the figure that needs to be at the forefront of a cadets mind.
Anyway, I just started writing this post with the idea of getting my thoughts down on paper - as i have done, it all sounds rather alarming! Maybe my sums are wrong, but it is definitely something I would want to take up with EJ if in that position.
It does seem funny that CTC McAlpine don't even mention the reduced salary AT ALL throughout the whole selection process, but do spend a long time talking about the £60k loan/bond package. Equally, it surprises me that on this thread people seem more preoccupied with the bond. Too caught up in the excitement of the thought of flying for an airline I guess. But when you're talking about the financial implications of the scheme, surely it is this £98k+ that is the real cost
btw - I am very keen.... but i am also rather interested in my potential earnings.
I would be interested to hear what peoples opinions on this are.
My questions are:
- do people agree that it is this £98k+ which needs comparing with other schemes/methods?
- Are people concerned about the 7 year bond and having no easy way out if they want to move on?
- Perhaps this is why some people do white tail courses!?