scroggs,
why would the costs involved in setting up an integrated school be so much bigger than for a modular one? Apart from groundschools, the modular schools have everything you need anyway, ie the planes and instructors.
Admittedly setting up an atpl ground school might be a considerable task, with high start up costs, but I see no reason why a school should not be able to offer zero to FATPL "in air" training, once someone has passed all their atpl theory exams elsewhere.
The ground school and the flying training are essentially two separate entites, and do not by any means need to be taught at the same place. I know that u need to get ur ppl b4 starting at somewher like bristol or london met, but that requirement could easily be removed.
The only difference between the flying side of integrated and modular courses is that with modular you take a ppl skills test, with integrated you go straight to the cpl test. ie bugger all.
Oh, a mod school would also need to set itself up for doing MCCs as well, which might cost a bit, but dont a number of the modular schools provide MCCs already?