The Golden Rule of GA..........

[BRL]

Just read on another thread someone has paid a huge wad of cash upfront for flying lessons. I know it is up to the individual so I am not knocking him for doing this at all, as I say, everyone for themselves and all that. I always thought though the golden rule when starting out is NOT to give cash upfront.

Some may disagree, hence the question, 'what do you think the golden rule/s of GA are as far as you are concerned'......?

[stiknruda]

GA Rules? My top 3

1 - The only hard thing about flying is the ground

2 - Gravity will always win, eventually

3 - It will always cost more than you expected


Stik

[leeds.flyer]

Well, I just wanted to comment on why I had decided to do this. I know you're not knocking me for doing so BRL, but just wanted m say :-)

Basically, the money was one less thing to worry about when booking lessons. When I origianlly started out, it had more to do with when I could afford it, as opposed to, when do I WANT to fly.

I guessed that it was highly unlikely that such a big copmpnay as Multiflight would go bust/close down etc. and I felt my money was safe.

Also, if I ain't got it - I can't spend it on other things :-)

I would however like to hear why people are against doing this??

Cheers
Paul

[G SXTY]

Never pay up front unless you have to, and if you do, pay as little as possible. I stumped up a $500 deposit to visit a well-known school in Naples, only to find they'd been shut down when I got there.

They very quickly refunded the money, but I could have done without the aggro, and I can well imagine a less scrupulous operator pulling the shutters down, taking the phone off the hook & leaving students with a large hole in their bank account and no school.

Caveat emptor

[KCDW]

leeds.flyer

This recent thread provides an example of the risks...

http://www.pprune.org/forums/showthr...hreadid=142168

[Gertrude the Wombat]

I would however like to hear why people are against doing this??

The school is essentially borrowing money off you.

Now, you wouldn't pay them up front unless their rate-per-hour for people who paid up front was sufficiently lower than then rate-per-hour for people who pay as they go that you were going to be better off, would you, ie the discount on the hourly rate is the interest they are paying you for borrowing your money.

Plus, given all the stories around of flying schools going bust and taking their students' money with them, you're going to want a bit more to cover the risk, aren't you.

So, in order to get anyone to pay up front, the school ends up having to offer a discount to up-front payers which is more than the interest they would have had to pay had they borrowed from a bank instead.

There's only one reason they would pay you more money in preference to paying the bank less money, which is that they've already tried the bank and the bank refused to lend them anything because their finances were too dodgy.

(This is roughly what I posted last time we had this discussion and nobody has pointed out any flaw in my logic or arithmetic.)

[tmmorris]

I think I had a lucky escape at Welshpool in 2001: as a novice I knew nothing of the dangers and paid upfront (though the majority was paid on day 1 of the 4-week course); subsequently the flying school closed but not until I'd finished my course...

Tim

[distaff_beancounter]

Business Insolvencies

From my experience as a cynical old beancounter:-

• Customers (or student pilots) are often the last to hear that a company is becoming insolvent
• The directors have to keep everything quiet, as a rumour about insolvency would prevent a financial rescue effort
• Insolvency may have been creeping up for some time, but customers are only aware after the company has ceased trading
• With hindsight, everyone says that the directors should have stopped taking deposits, but they were accepting every bit of money that they could lay their hands on, in order to try & rescue the business

Then once a liquidator has been appointed, the proceeds of the sale of the company's assets has to be distributed in the order specified by the Insolvency Act. The order for this is broadly as follows:-[list=1][*]Liquidator's fees & expenses (of course!)[*]Secured creditors - usually the bank & finance companies who have funded aircraft. These are paid the proceeds of assets over which they hold a charge. Banks often hold a charge over all the company's assets.[*]Preferential creditors - Inland Revenue, Customs & Excise & employees[*]Unsecured creditors - this includes everyone else, including customers who have paid deposits up front[*]Shareholders[/list=1]
In many liquidations, there are only sufficient funds to pay 1 and 2 in full. If any funds do trickle down to 4, unsecured creditors often only get a few pence in the pound of what they are owed.

[J.A.F.O.]

GA Rules? My top 3

1 - The only hard thing about flying is the ground

2 - Gravity will always win, eventually

3 - It will always cost more than you expected


Stik

Stik

Almost with you on that except my list would be:

1 - It will always cost more than you expected

2 - Gravity will always win, eventually

3 - It will always cost more than you expected

I know that I said "It will always cost more than you expected" twice, but that's because it costs so much more that it counts as two.

[down&out]

Fortunately I didn't have to pay to learn to fly (thanks HM taxpayer and the UAS)

Unfortunately I bought into what looked like a reputable outfit "European Flyers" Euroshare Gold scheme, run by Tony Holden. This company had been around for 10+ years and looked OK - but hey this was a hobby and I was naive - our friend the beancounter had not posted his words of wisdom. Also I assumed, but did not check, that my "share" was for part of an a/c. So when the company was folded, I - and around 50+ other people in the same situation, lost our money.

We all thought the company was stable and financially sound and all proven wrong (the aircraft had seperate mortgages on them so the banks took all the proceeds of sale of the a/c)

So I totally agree, if the reduction in costs are greater than the company going to the bank be very aware. Other than that, be aware - too many schools have folded and I am sure will do so in the future......

[DubTrub]

1. Don't hit the ground.

2. Don't hit another aeroplane.

[v6g]

3 useless things in GA:-

Runway ... behind you
Altitude ... above you
Fuel ... on the ground

[High Wing Drifter]

Never go where your brain didn't arrive 5 minutes before.

[Pull Back]

V6G Just a small addition .........


-------------------------------
3 useless things in GA:-

Runway ... behind you
Altitude ... above you
Fuel ... on the ground - unless you are on fire
------------------------------------------------------------



PB

[distaff_beancounter]

V6G Just a small addition .........

AND ..... The 4 lifejackets that somehow got put into the nose luggage locker of the twin, before we set out on the long direct route over the sea, UK to Antwerp ......

[squibbler]

Hmmmm, cash up front. No, no, no.

A few years back a neighbour of mine was telling me a tale of woe. He'd paid £3000 up front to a flying school (who shall remain nameless) and ,you guessed it, 7 hours into his flying the school went tits up. Further into the conversation he mentioned how large his credit card bill now was.

"Did you pay via credit card then?" said I.

"Errr yes" said he.

"No problem then, ring your credit card peeps & explain your situation. They've effectively lost their money to the flying school, not yours - you should get virtualy all your money back"

"Well b**gger me" he said. I declined.

He did get the balance of his £3000 back within a couple of weeks less an £80 admin fee and was an extremely relieved and grateful man.

Golden rule? Whatever you're buying, be it £3000's worth of flying lessons or a new sofa from from DFS, use the credit card!

[gingernut]

Yeh, its something to do with the consumer credit act. The cc companies tend not to shout about it, but I seem to remember that you have protection if you spend £100 or more. Interestingly, if you spend only £101 on the credit card, and pay the £2899 balance cash, the cc company is liable for the £3000.

The law may well have changed, so check before relying on my words of wisdom.

[RodgerF]

"If you've time to spare"

"Go by air"

[BeauMan]

My three golden rules?

1 - Never pay for anything upfront

2 - Never let the aeroplane go somewhere my head hasn't already been five minutes earlier

3 - Never stop learning

Seems to all be working so far...

[Hampshire Hog]

I live near Blackbushe where the European Flyers debacle referred to above took place. I wasn't on the receiving end, but I know several people who were and I wouldn't have wanted to be one of them!

There are very few flying schools, no matter how big or well established, with which you should invest vast sums up front. If you absolutely insist, get hold of a copy of their accounts for the last 3 years or so and (if you don't understand them) ask someone who knows to explain the school's financial history and current financial risk. If the accounts aren't published and the school won't let you have them, don't place your money with it. Doing this at least allows you to make an informed judgment.

Paying up-front for a discount might seem attractive, but it is better to manage the funding for your flying yourself (and to view that experience as part of your career development).

The simple message is: If you give your money to a flying school in advance, you may not get your flying and you may never see it again!