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why the need to hold an ATPL to be an FO???
So one day they can be a Captain......
And also a means of culling the mob if there are too many panting to get a job. In another era at Ansett, you could get a job as F/O DC3, F27 etc with a bare commercial licence and no instrument rating. Because of the seniority system and bugger-all movement up the line, there was little incentive to study for the SCPL theory exams, now called ATPL exams. When command slots came up suddenly there were all these CPL 8,000 hour first officers who could not be bothered to do the exams and were perfectly content to stay as permanent copilots on good money and protected by seniority.
Ansett for example had to nip this in the bud and I believe gave CPL first officers two years to pass the SCPL theory exams or get the boot. Might even have been less than two years. Some SCPL candidates failed the exams continually and left the airline.
After that, the trend was the airlines required all theory exams to have been passed before joining the airline. Similar to present day. All the above from memory which can be unreliable at times.