CABAIR - General discussion for those involved.

[waco]

bmi are in the process of going.

I will be very surprised if Monarch are still going in two years time.

TCX are reducing fleet size by 6. I bet that number doubles in the next year and thats a BEST case situation!).

Europe remains on the brink of an economic disaster that could yet make the 1930's look good.....and people are still spending money on flight training .

Got to be barking !

[mad_jock]

you forgot Thompson

And on another thread someone mentioned that BA were maybe thinking about putting a hold on the cadet thing after this round.

[chrisbl]

The new Cabair has to find about £280,000 for the assets and a sizable amount more to fund the working capital.

That can come from a number of sources, shareholders putting their money at risk in the form of shares, shareholders lending the new company money, less risky, loans from financiers and last of all deposits and upfront payments by students, the chapest form of borrowing and with the least risk for the company.

With the exception of student upfront payments, the other sources of funding are expensive, and with the track record of this bit of aviation probably carries a substantial risk premuim built into the interest rates. The satisfactory servicing of this debt is vital and when it cannot happen then the pack of cards collapses. The cost of servicing this debt is paid ultimately by the customers (students).

(You can see why getting students to pay up front looks attractive and why a "discount" is offered to make people think they are getting a bargain.)

The problem with a business such as this is that its difficult to control costs. If they own and operate their own kit, then they take the risk, if they dont, then they are subject to others not letting them down. If you are in a strong position then you have more clout, if not then you have to take what you get.

Anyone who deals with the new Cabair will remember what they lost with the old Cabair and try and recover some of that. Who pays for that, the students in the end.

Some musings, thats all.

[rmcb]

The problem with a business such as this is that its difficult to control costs

This whole industry is based on paying forward - the present students will always be covering the costs incurred by the previous generation (if you're lucky!). If you are going to attract new students with competitive prices, you are going to run with insufficient margins. Eventually you will go bust.

All of us who have been suckered into an FTO for going the cheapest route (understandable) are to blame for this. This is why the CAA needs to be an arbiter and regulator of these organisations and provide a structured payment system with safeguards. After all, we can only train at establishments with their blessing.

The obvious conclusion, I believe, is that flight training is too cheap. Sometimes cheap is expensive!

Contentious, eh?

[FOUR REDS]

chrisbl and mcb

I like your posts.

[chrisbl]

I have heard that what finally sent Cabair under was a winding up order for about £40,000 from a company called "Abraxas Aviation", for "consultancy services"

And you can see who the company director of Abraxas was! (The man who was escorted from the buiding at Elstree and did very well out of the whole deal.)

Stephen John Read - Who runs it?

You couldn't make it up...

He has been involved with Abraxas since 1992 so I suspect that rather than being on the regular payroll, he gets paid consultancy fees into his company and then either pays himself a salary from that or a dividend.
There is nothing wrong with that and it happens all the time. I suspect a lot of freelance pilots operate that way.

I presume once he fell out with them he wanted paying for what was owed, it probably was a valid claim otherwise Cabair would have fought it but for the fact that they were out of cash.

Sometimes you can read too much into things and go off on the wrong track. It does not excuse the fact that Cabair was shaky and making unrealistic claims up to the end. If a £40k debt pushed them over the edge, then they were well short of having a well financed model.

Once one creditor scents blood they all come out, credit is restricted, aircraft chained up until fuel bills are paid, students sent on "study leave" etc etc all with the impact that has on the image and reputation of the organisation.

The problem with wannabe pilots is that they are blind to all of this, they see only the uniforms, the gold bars, listen to sales pitch (polite reference to what comes out of a bull's bum) have the dream of being in the right hand seat of an A320 in 2 years and all that and stump up £70k. The parents are just as bad for not doing a proper due diligence as well. You would not buy a property without proper survey, why make such an investment without proper research.

What really irritates me about this training market is the economy with the truth and the misleading use of statistics. The greatest demand for pilots is in the Far East where being Indian, Indonesian or Chinese counts. Using global numbers and using that as a sales pitch to flog EU training is just rubbish unless of course you are Indian, Indonesian and Chinese.

I cannot believe that people are seriously considering Cabair, and I feel sorry for some of the excellent training staff there.

An old Chinese proverb goes something like this: a good predictor of the future is usually the past.

How often do we see history repeat itself?

Just my 2p worth.

[Groundloop]

you forgot Thompson

How can so many people keep getting this wrong?

THOMSON - no P!

[rmcb]

So... is anyone attending Cabair International's 'Gatwick Airline Pilot Roadshow' this saturday? Entry is free - what have you got to lose?

Cabair International Aviation Seminars

[rmcb]

In fairness, all they missed out was the question mark at the end...

[chrisaviator]

Great intensive for all the new student there to get a taste of what they are like before they put any money down....

On the plus side you can't believe the SH1TE sales ploy they gave me and another chap on the course about how they are still the same company, but that we still need to give them more money as ours had been lost....funny as anything....my sides hurt so much because they are clearly so stupid that they think that they can make a fool of me twice....

Come on Cabair...let me introduce myself to your prospective students, let me tell them exactly what you are like and how actuate your lying website is....

[smith]

So... is anyone attending Cabair International's 'Gatwick Airline Pilot Roadshow' this saturday? Entry is free - what have you got to lose?

Cabair International Aviation Seminars

I believe they will be offering some great "pay up front" discounts on Saturday if you pay it all on the day. I'm in.

[rmcb]

Many companies have the opposite problem where they go under because customers have not paid them so why does aviation have these problems ? Is it just very tempting to raid a cash pile to prop things up in the hope that they will get better.

I believe you will find that the fee up front ploy is used to get a big injection of lucre into the coffers to pay for the costs that weren't paid maybe a year before. This is why this type of company, I am sure, would disregard the escrow option. They aren't after guarantees - they are after the cash here, now, fuel bills to pay etc.

It is usually caused by needing to undercut the opposition to get the business; eventually you undercut so much that your margin is nil. Then the directors raid the assets, declare the entity bankrupt and start the same company the next day with no liabilities and a massive startup bung from the Westminster idiots.

Cheap can be expensive - we (the prospective clients) are responsible for this. Chances are you will be OK, but someone always ends up at the end point broke. Look at any Ponzi scheme and you will see the similarities.

I'm in the wrong game...

It would be better to take the opportunity to cut numbers down to say a maximum of two Intergrated providers and a sustainable maximum for Modular, so long as schools agree to adhere to an agreed Scheme of Charges in return and student funds are placed in an escrow account managed by the CAA.

You'd think so; I refer, of course to my post in this thread: http://www.pprune.org/6787712-post10.html

[rmcb]

Anyone from an FTO care to comment on the hoops the CAA put in their way to reassure them as to their propriety with 'banked' money? Anyone with knowledge of the CAA care to comment?

http://www.caa.co.uk/docs/33/SRG1175Issue1.pdf

[BillieBob]

The responsibilty of the CAA in respect of financial viability is limited to ensuring compliance with Paragraph 9 of Appendix 1a to JAR-FCL 1.055 (i.e. A FTO shall satisfy the Authority that sufficient funding is available to conduct training to the approved standards (see IEM No. 2 to JAR–FCL 1.055)). Provided that a snapshot of the FTO's finances at the time of approval (or re-approval) shows that sufficient funding is (or is likely to be) available, the approval will be issued (or renewed). Thereafter, any issues arising between the FTO and its 'customers' are a matter for Trading Standards and not the CAA.

Of course, this depends upon the CAA conducting a full financial evaluation (in accordance with IEM No.2 to JAR-FCL 1.055) of each FTO at each approval and/or re-approval. If this has not been done and the Authority has, for example, simply accepted a statement from the accountants that the company is a 'going concern' then there might be a case for judicial review.

[FANS]

With the exception of those on a tagged Flybe scheme, why on earth would you have started an integrated flying scheme in the last 0 -18 months?

I can understand wealthy individuals doing the CTC wings scheme, and potentially getting a zero hour contract with EZY.

I can't however understand people doing integrated, untagged with Cabair in the current climate. What job did you seriously expect at the end?

That's not to excuse what's happed at Cabair, which seems to work on the pay us now, and we'll try not to go bust before we finish the training that we owe you. These companies should have proper bonds in places or escrow accounts.

[rmcb]

Thankyou for that, BillieBob.

[Rflying53]

The (unaudited) accounts for Abraxas Aviation Ltd for y/e June 2010 show its liabiliites exceeded its assets at that point by £112k. The accounts were signed in February 2011, just after the 3 new shareholders/investors had put their money into 'old' Cabair Holdings Ltd. The fact that Cabair was in trouble and publicly talking about closing parts of the business by mid-2011 will be exercising the lawyers for both the old and new shareholders and management.

Think about why the Flying Pictures CEO and FD pull out of the management of Cabair in October 2010, less than 6 months after getting involved. Ultimately rmcb is right - flying training is too cheap: it's almost impossible to make a sustainable profit in the UK. How many hedge funds and venture capitalists are clamouring to invest in the industry?

The good news is that the lawyers will do well out of this whole sad tale. Career suggestion - wannabes should spend their money on training as lawyers rather than pilots.

[porridge]

Cabair "Stealth" Roadshow at Gatwick

Did anyone go to this? If so what was the attendance like?
"One born every minute" (or perhaps 10 when it comes to Aviation!)

[directvector]

You can always rely on wikipedia!!!!

Cabair - Wikipedia, the free encyclopedia

I'm a particular fan of the extended use of past tense in this article!!!!

[rmcb]

limilted space available

This, I fear, relates to the one Portacabin left in their ownership (ex-greasy spoon on the layby just outside Cranfield).