View Full Version : Virgin to cover Endorsement Cost

Best Speed
6th Jun 2007, 06:59
There has been word around the camp fire that Virgin will cover the cost of type rating and bonding instead. This is rumoured to commence as of July 1, with Jet* to follow close behind.:D

Now if this were true, wouldn't this open a can of worms for those that have already paid. One would hope that all those out of pocket would be re-emburst.:ugh:

6th Jun 2007, 07:07
No can of worms at all, it just means that those not prepared to pay for an endorsement dont pay for an endorsement.

Bolty McBolt
6th Jun 2007, 07:08
I will stand corrected but it may be illegal to "bond" someone in OZ to their job. I beleive it is linked to an old law from way back when Pontius pilot was still flying..

and reimbursed not re-emburst

6th Jun 2007, 07:23
Nope, bonding is fine and has been for at least the last decade. Many aren't aware that even QF drivers are bonded when they first join (or at least used to be, I haven't read that section of the award for some time- about 12 1/2 years!). I don't even recall the time frame you were bonded for any more. It may have been two years.

6th Jun 2007, 07:25
Hardly Normal are now selling the same plasma TV I bought 18 months ago for a truckload less than I paid. I might see if I can get the difference reimbursed...

tail wheel
6th Jun 2007, 07:48
I think Bolty may be correct. An employee can not be "bonded" to a job and financially penalised for leaving within the bond period.

It is my understand the "endorsement bond" always was a financial bond or guarantee (not an employment bond), which is amortised over a pre determined employment period, possibly five years.

The employee may resign within the bond period of employment, but under the financial bond may be required to repay that residual value of the bond, not yet amortised through employment.

Theoretically at least, an employee "working off" a financial bond could be paid less (by the value of the bond amortisation) than the employee who pays or brings his endorsement to the job. There are also tax implications.

I don't work for the airlines but it will be very interesting to see what occurs if endorsement bonds are introduced, in lieu of paid endorsements. Either way, I suspect the airlines won't be losing.

Just my 2 cents worth! :}

Bolty McBolt
6th Jun 2007, 07:49
Hi Keg
Can you shed some light on the Bonding of pilots you mention.
Back in early nineties QF imported some engineers from the UK and told them they were bonded for the cost of moving them plus the costs involved with visa/permits etc sliding scale over 2 years etc
A few got home sick or were not delivered what was promised during interviews so they packed up and left. QF tried to make the contract stick that both parties signed in good faith but QF found the contract didnt hold water in court. (I never found out why)
One guy even went for damages against QF due to lost money buying selling cars, home etc
Pilots may have been told they were bonded but did anyone try the water ?
What were the pilots bonded to?

PS A mate of a mate tells me that NZ had to change the law to allow bonding...

6th Jun 2007, 08:17
I have heard some pretty reliable information that VB is indeed switching to bonding.......BUT....... If you think that the company is not going to recover their costs then you are kidding yourself.

Firstly, VB has a very good relationship with Alteon and as such are able to get a pretty damned good rate on the simulators when purchasing bulk sim time.

Secondly, the actions of a major company are very rarely altruistic. If VB are taking care of the training then they can exact greater control over how many people come through at a certain time instead of leaving it to the individual and having very staggered course dates. With this the induction courses can be scheduled to be larger and more efficient. Also if the customer at Alteon is an airline then they can teach the procedures of that airline instead of the generic boeing procedures which are taught to the so called 'unaffiliated customers'

Thirdly, contrary to poular belief there ARE plenty of people who are willing to pay up front... after all an outlay of $26K (as the course now costs) for an increase in salary of at least that amount seems to make sense to me. But that is neither here nor there. On the pay up front issue.. i know that the tax deductibility of the costs is a hotly debated topic..... remember that the precedent has pretty much been set and there are plenty who have claimed it succesfully.

Finally, and with reference to what i said earlier, VB will recover their costs in other ways such as....... training wages until check to line, not on full allowances until check to line etc.. (don't quote me these are just some of the rumoured possibilities).

I think you will find that when you look at both sides of the equation i.e paying up front vs bonding, that they will come out pretty similar in the mix, perhaps even in favour of those who pay up front. After all...do you really think that the company would change it overnight and risk alienating the qualified masses already with the company that have paid upfront, what is keeping them here if the company did screw them like that. They simply cannot afford to get it wrong and lose more experienced people.

One thing is for certain... motives are very rarely unselfish. I for one think it is good that the bonding will be a reality... it means that those who do not have access to the upfront money can have a fair go at it.

Just my humble opinion.

Safe flying! :ok:


6th Jun 2007, 08:36
Have you considered that Virgin has probably negotiated the simulator training for initial endorsement training as part of the package for getting the E170/195 established the Australia? In which case it happens to be convenient for them as it will give them a "marketing advantage" when trying to attract EXPERIENCED pilots to the group.

The cost to them for the endorsments will be zilch.

6th Jun 2007, 17:24
There is no such thing as a free endorsement when you buy an aeroplane.

It is all negotiated as part of the price of the aeroplane - you want more endorsements the price goes up, you want less endorsements the price goes down..

6th Jun 2007, 20:38
They sure will pay for the endorsement, bond you and put you on a training salary for a period of time. Either way you are still paying for the endorsement. I guess this way they help spread the pain?

Best Speed
6th Jun 2007, 23:28
:cool: Nice ones guys. Although we got a bit off track there, I think the answer is clear. No more up front cost for endorsements.:D

I like it. I know I cant pull 20-30K out of think air and be expected to surport my self and family with no income for what could be as long as 10 weeks.

6th Jun 2007, 23:45
REX have been doing exactly what everyone is talking about

ie, no endo costs, training wage until checked, then bonded.

7th Jun 2007, 01:11

You would be well aware that, due to the rivalry between manaufacturers, endorsements are commonly offered as an incentive as part of the package when negotiating the sale of aircraft. In that sense, they are free. The aircraft would not be any cheaper if the operator decided to go without them. Airbus especially commonly does this.


It's a sad day when we accept that paying tens of thousands of dollars for endorsements is ok just because the airline decides it can charge you. In a fair world, if you are going to pay for your qualifications, then it would be fair to charge your employer for the use of that qualification. The airlines are simply using bully boy tactics while they can.

7th Jun 2007, 03:36
In regards to paying or not paying for an endorsement, here is one other point that people always seem to overlook or turn a blind eye to, managements especially.
Regardless of whether you pay for the endorsement with a personal loan, upfront, or the" company pays for it" upfront, the simple fact is that if you are not receiving a good salary when you join the company either as an F. O. or a Captain, THEN YOU ARE STILL PAYING FOR THE ENDORSEMENT!!

For example, if the starting salary is $80,000 per year, and you pay 30,000 for the endorsement upfront, you are effectively only earning $50,000 in the first year. If the company is only paying $50,000 as a salary in the first year, but say that they are paying for the endorsement as you are not getting a personal loan to do so, you are of course, STILL PAYING FOR IT!

If this is what Virgin Blue and Jet Star are thinking of doing when they stop charging upfront for an endorsement, that is pay a lower " training wage" , then since the pilots are still paying for their endorsement, they have no right to ask for any kind of a bond period as the money is still COMING OUT OF THE PILOT'S POCKET NOT THEIRS!!!!!

Back to the example I used above, that means the first year wage stays at 80,000 per year,AND the company pays for the endorsement cost, then a one to three year bonding period is fair enough, 5 years as some have suggested IS NOT.

It will be interesting to see what the EBA or AWA 's at these companies state as far as starting salaries go once they "drop endorsement costs".

7th Jun 2007, 07:14
Salary sacrifice could be the go?

ATM you pay for your endorsement which takes about 4-5 weeks with NO pay? is that right. Lets Call it 5 weeks with out pay around 5k plus 30k plus accomadation and food etc... another 2k....= Around 37k.

If the VB changes and bond you then you should be employed from day one of endorsement, accomadation provided, plus no 30k etc....

What does a starting FO in the first year gross?? around 70k? second and third year around 90k? so about 250k over three years.

If you salary sacrifice your endorsement over three years the money you save on tax and the interest you would have to pay on your loan would be huge.

Now I am no fan of paying for an endorsement, training should be a cost just like fuel is, but the problems J* and VB are having keeping pilots is it's too easy for a pilot to leave these days because they dont owe anything, there is nothing tieing them to the job(unless they start paying more:O). So bonding you 30k for three years would more than likly make you stay til then. Also if you pay 30k then you are more than likley wanting a good return for your money then some who hasn't paid and is bonded.

So really there are three options

1. Bond
2. Company loan ie. reduced pay
3. or pay for your endorsement

They all have positives and negatives.

Bonding with out reduced pay is they way to go IMO. Company invests in you and you return that investment with loyalty.

7th Jun 2007, 17:31
...in addition to blue's post...firms usually pay for their accountants to get a CA or CPA and then they give them a payrise when they're qualified

7th Jun 2007, 20:17
... and an accounting degree doesn't take upward of $100000 to then be told you'll have to pay an extra $30000+ in one way or another just to gain a junior internship...

apples with apples... ;)

Metro man
7th Jun 2007, 23:50
And start running checks on accountants performance every six months, fail and they are out.:E

Howard Hughes
8th Jun 2007, 00:38
but the problems J* and VB are having keeping pilots is it's too easy for a pilot to leave these days because they dont owe anything, there is nothing tieing them to the job(unless they start paying more).
I don't agree that money alone will tie more people to the job! In the past people stayed at their companies, because the company respected them and they in turn respected their company.

Sadly if these companies showed a little more respect to their employees, they night receive a little in return.

Respected employees are loyal employees, apparently they don't teach that in an economics degree...;)

Cpt Reality
8th Jun 2007, 01:24
The biggest problem with jobs in aviation is that, usually, there are far more pilots than jobs. This creates lower wages due to the competition involved.

The difference between lawyers/accountants and pilots (in most instances) is if remuneration was lowered due to an oversupply of suitably qualified candidates, lawyers and accountants would simply quit and retrain themselves to do another job.

Pilots (in most instances) will not resort to this due to the fact that:
A) They love flying, and
B) They have sunk too much money into their training.

What we are possibly about to witness in the coming years (an undersupply of suitably qualified candidates) as everyone here knows, is definately not the norm, so everyone should make the most of it while it lasts. All that will happen in a few years time is another oversupply of pilots as people rush into training to pursue aviation careers.

Blue-Footed Boobie
8th Jun 2007, 07:53
Capt. Reality,

To treat pilots as another 'profit centre' by getting them to pay for a cost which a company should meet is appalling enough, who's plane is it they will fly? who's pax will they fly around? etc. etc, but my point is that not only are they taking advantage of pilots they are also discriminating against them as well.

Make all employees pay for their training but as you point out it's a market place and pilots sadly are desperate enough to play along with this game.

Blue Foot