The Golden Rule of GA..........
If you have the funds to pay to the Flying School, why don't you invest them in an account with a bank that enables you to access funds at 10 days notice or faster, and earn interest on the account for yourself!!
Join Date: Oct 2001
Location: Dorset, UK
Posts: 619
Likes: 0
Received 0 Likes
on
0 Posts
Hampshire Hog Whilst I agree with your advice about getting the accounts of schools, that in inself may not prevent students losing deposits. Over the last twenty years, I have seen many insolvencies in GA, including European Flyers.
For a private company, accounts do not have to be filed at Companies House until 10 months after the company's financial year end. A lot can change in those 10 months.
Also I have seen a lot of "creative accounting" as in European Flyers supposed sale of "shares" in aircraft, mentioned above.
When looking at published accounts you need to be able to look at the more subtle factors such as whether the "cash at bank" is more than the "students deposits". Are the larger creditors (including loans to the company by the directors) secured & so will thus rank above the the students deposits in the event of a liquidation? Have the assets, including aircraft, been revalued in the balance sheet? This makes the balance sheet look more healthy, but does not actually put a penny into the bank account.
Apart from the accounts, you need to look at the Register of Charges at Companies House to check just what assets have already been pawned to the banks, finance companies & even the directors. These creditors will all rank ahead of the students in a liquidation.
Anyhow, why is there a culture of large deposits up front in flight training? I can understand a double glazing firm wanting a deposit before they manufacture a dozen windows to fit a house, It the customer defaults, then the windows already made, are only worth scrap value. So what costs does a FTO have to incurr up front, especially for PPL training?
My advice is always - do not pay up front!
But, if you must, then pay by credit card, so that you may be able to reclaim any losses from the credit card company if the school does go bust.
For a private company, accounts do not have to be filed at Companies House until 10 months after the company's financial year end. A lot can change in those 10 months.
Also I have seen a lot of "creative accounting" as in European Flyers supposed sale of "shares" in aircraft, mentioned above.
When looking at published accounts you need to be able to look at the more subtle factors such as whether the "cash at bank" is more than the "students deposits". Are the larger creditors (including loans to the company by the directors) secured & so will thus rank above the the students deposits in the event of a liquidation? Have the assets, including aircraft, been revalued in the balance sheet? This makes the balance sheet look more healthy, but does not actually put a penny into the bank account.
Apart from the accounts, you need to look at the Register of Charges at Companies House to check just what assets have already been pawned to the banks, finance companies & even the directors. These creditors will all rank ahead of the students in a liquidation.
Anyhow, why is there a culture of large deposits up front in flight training? I can understand a double glazing firm wanting a deposit before they manufacture a dozen windows to fit a house, It the customer defaults, then the windows already made, are only worth scrap value. So what costs does a FTO have to incurr up front, especially for PPL training?
My advice is always - do not pay up front!
But, if you must, then pay by credit card, so that you may be able to reclaim any losses from the credit card company if the school does go bust.
Join Date: Jan 2001
Location: Between Galaxies
Age: 39
Posts: 453
Received 0 Likes
on
0 Posts
I got caught by this - gave around £2k up front for 21 ish hours to a school in North Wales to get the reduced rates.
I only flew 8 hours due to bad weather, then when I had to move to Sherburn because of being at Leeds uni I ended up loosing £500 because the school owner wacked full price on everything due to not flying 21 hours.
Be careful with what you agree to - they're all nicey nice when you're giving them money, trying to get it back brings out the devil in people.
be careful
I only flew 8 hours due to bad weather, then when I had to move to Sherburn because of being at Leeds uni I ended up loosing £500 because the school owner wacked full price on everything due to not flying 21 hours.
Be careful with what you agree to - they're all nicey nice when you're giving them money, trying to get it back brings out the devil in people.
be careful
Join Date: Jan 2002
Location: Earth
Posts: 1,189
Likes: 0
Received 0 Likes
on
0 Posts
Some may disagree, hence the question, 'what do you think the golden rule/s of GA are as far as you are concerned'......?
1. Do not allow yourself to be taught by an airline wannabee.
2. Go flying with an instructor for an hour every Spring (however many hours you have).
3. Get good on the radio as soon as you can and know what you are actually requesting.
4. Be aware of the fact that 99% of airmanship is what happens between start up and the take off roll.
5. Visit 10 new airfields every year to avoid staleness in your methods.
6. Go to small landing sites frequently. On arrival insist on paying a landing fee even if they refuse. If the airfield disappears it won't ever come back again.
7. Take at least one child flying every year (although make sure he hasnt got 666 written above his hairline somewhere).
8. Fly in the winter as much as possible to keep nicely current.
9. Do not drink a drop of alcohol the night before flying. I don't care what anyone says, it does affect ones performance.
10. Do not listen to boring tossers waffling on at 4.30 in the morning just because their kid woke them up and they can't get back to sleep......
P.S If my pont number 1 has offended anyone then I'm not sorry because I think it's true!!!
Last edited by Monocock; 16th Sep 2004 at 07:06.
Join Date: Dec 2003
Location: Too bloody far from FALA
Posts: 47
Likes: 0
Received 0 Likes
on
0 Posts
I'm not sure what the going rates are in the UK on credit cards but this is just about the worst piece of financial advice I've ever heard.
If you're going to pay off the credit card fast enough to come out ahead against the discount offered for paying up front, then you would have been better off saving for six months, holding the cash in an interest bearing account and paying as you fly (or arranging a fixed monthly fee with the school if this is simpler).
If you're going to pay off the credit card fast enough to come out ahead against the discount offered for paying up front, then you would have been better off saving for six months, holding the cash in an interest bearing account and paying as you fly (or arranging a fixed monthly fee with the school if this is simpler).
Join Date: Oct 2001
Location: Dorset, UK
Posts: 619
Likes: 0
Received 0 Likes
on
0 Posts
I'm not sure what the going rates are in the UK on credit cards but this is just about the worst piece of financial advice I've ever heard.
I assume that any financially astute person pays off their C/C in full every month, this not incurring ANY interest.
If you save first, then pay a large sum up front by cash or cheque, then you have no recourse if the FTO goes bust, before you have flown off those hours.
Join Date: Dec 2003
Location: Too bloody far from FALA
Posts: 47
Likes: 0
Received 0 Likes
on
0 Posts
Ah! Fair enough 'beans 
.
My golden rule? I'd have to go with :
"Pick a VERY still day the first time you take your significant other up on that first flight".
Not a very happy flyer, Mrs Bok
.
. My golden rule? I'd have to go with :
"Pick a VERY still day the first time you take your significant other up on that first flight".
Not a very happy flyer, Mrs Bok
.
That'll be marital partner Mono anybody daft enough to be in a group with me would soon be fed up of my constant expenditure on the mistress living in the hangar 
Join Date: Jul 2004
Location: Hampshire
Posts: 178
Likes: 0
Received 0 Likes
on
0 Posts
Distaff_Beancounter
I agree entirely with everything you've said about my post re. checking accounts. Enron is probably the main example and there's always some new fiddle.
I simply recommend checking accounts etc. because there are always those who will ignore the advice NEVER to pay up front. Those people who should take action to minimise the risk. Research will at least permit a (more) informed decision. Also, if they have to take the accounts (and the info you recommend) to an adviser, there is another opportunity for them to be stopped in their madness.
Mmm! Yes and No on this one. I started at Blackbushe being taught by an 'airline wannabee', then moved to Wycombe, where my instructor is a highly experienced retired airline captain. When I started with my new instructor, he commented that I had been 'well taught' by that 'airline wannabee'. The golden rule is to find an instructor whose style matches your needs/wants and who does not put you in unnecessary danger.
HH
I agree entirely with everything you've said about my post re. checking accounts. Enron is probably the main example and there's always some new fiddle.
I simply recommend checking accounts etc. because there are always those who will ignore the advice NEVER to pay up front. Those people who should take action to minimise the risk. Research will at least permit a (more) informed decision. Also, if they have to take the accounts (and the info you recommend) to an adviser, there is another opportunity for them to be stopped in their madness.
Do not allow yourself to be taught by an airline wannabee.
HH
