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Old 9th Feb 2011, 05:55
  #176 (permalink)  
v6g
 
Join Date: Nov 2003
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Fair question.

The £65,000 is what the integrated schools charge. But then their prospective employers, realizing they have an oversupply of eager young things who have already proven themselves to be naive and impressionable, then ask them to make an up-front investment in their airline under the guise of an over-priced "type rating" with line "training" of about £20,000+.

Add to that the unfortunate reality of needing to feed oneself for a year and to be housed, and the keen aviator is now in with close to £100,000.

But it doesn't stop there. Because typically the money is obtained via a loan from a bank, the total cost of the show is now about £140,000 (although to be fair I'm neglecting the effect of inflation over the amortization period in that back-of-the-envelope calculation).

That £140,000 will, of course, have to be paid back with after-tax money (at lets say a 35% marginal tax bracket), so the total earnings required to pay for that wonderful integrated course is likely to be around £220,000 (again inflation effects conveniently neglected).

It suits the airline (heavily indebted employees make great workers), it suits the school (BMW's aren't cheap you know), and it suits the bank (the dividends on my shares have to be paid somehow).

It's a beautiful business model.
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