Nichibei,
I think that you are wrong on both counts.
First, I think the relevant section of tax code is ITEPA section 250 and 251. This is the UK Income Tax Earnings and Pensions Act of 2003. It is a cryptic document, as Parliament's Bills tend to be.
I actually found that document by finding this one first, which refers to ITEPA section 250 and 251:
http://www.hmrc.gov.uk/manuals/eimanual/EIM01235.htm
Note: This document is a bulletin clarifying what will and will not pass the tax inspector's sniff test based on precedent's set by a legal case.
The document makes four points, "...there will be some cases where the link between the employment and the pre-commencement training will be so strong that the reimbursement will qualify for exemption under Section 250. For example, if an individual has accepted an employment offer from a new employer, to start work in the reasonably near future, and the individual then pays for training relevant to the job, exemption will be due if the employer agrees to reimburse the costs after the employment has begun."
Nothing could be stronger than the fact that one can't fly for NetJets unless one has an fATPL. There is ample evidence in a few older threads on this forum and on OAAs forum that the cadets do get a rather lengthy contract before they start training. I suspect the fact that they get a few weeks leave at the end of the course before starting their Type Rating probably qualifies as "reasonably near future" in the eyes of Inland Revenue.
There is absolutely nothing in any of the documents above that ties the tax relief to a loan.
Just because you think it isn't right or that it is fraud, doesn't make it so. Lots of nations use tax incentives to promote investments that the government thinks will stimulate the economy or enhance the educational status of citizens to keep said nation competitive in the global marketplace. The UK doesn't have many such incentives, but this certainly appears to be one of the few.