That's a shame.
There will be other schools go bust before the year is out unfortunately.
I reckon we will loose around 50% of the schools by April 2014.
Safety Management and the requirement for all RFs to become ATOs - is going to mean you'll have to be big (high turn over required) with appropriately qualified staff, meaning it just won't be financially viable for small schools to survive.
Costs will go up as well, which will be passed to students. Margins in flight training have always been low, which means I 100% concur with Mad Jock.