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Old 21st Jun 2013, 13:57
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Bealzebub
 
Join Date: Nov 1999
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I think you misunderstand what the bond is.

The £69,000 (or whatever it currently is,) is the cost of your training other than the foundation course. You pay it in stages, and it in turn does one of two things. At the conclusion of your course it pays for that course of training. Alternatively (as it is packaged in this fashion,) it can be transferred to a "sponsoring" airline company. When it is transferred, it is in effect being bought by that company. What then happens depends on the company who has bought it. What often happens is that the bond is used to allow the cadet pilot to sacrifice a corresponding amount of their annual salary in return for the repayment of bond monies. This has significant tax advantages. It also shifts the "sponsorship" risk burden to the trainee, who clearly will not benefit unless they progress to a dovetailed employment contract as a result of an airline placement. Some airlines give the cadet an option of either swapping salary for bond repayments (for anything up to 7 years,) or simply taking a regular salary (at the published cadet level.) In the case of the latter, the bond is simply written off as training costs, and there is no tax advantage to the cadet.

During the placement period (and again it very much depends on the airline) the cadet often receives no basic salary, but usually does receive their allowances from the airline. This is supplemented by a repayment to the cadet from their bond monies, of around £1200 for 6-8 months. Some airlines will also pay for the cadets type rating.

You need to understand that the terms and conditions of placement and any subsequent employment, vary from company to company. Each contract is different, and you cannot know what may or may not be on offer to you (if anything,) upon successful conclusion of your own training course. Clearly some placements are much better than others.

Fundamentally, the £69,000 "bond" is to pay your training costs. You pay this, and in turn it pays those costs. Its advantages very much depend on the offers that might be available to you upon conclusion of that course. To that end it would be wise to base your planning on the basic concept.
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