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L3 VS CAE VS Leading Edge vs FTA- What is the best choice 2021?

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L3 VS CAE VS Leading Edge vs FTA- What is the best choice 2021?

Old 6th Nov 2022, 17:16
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Originally Posted by Hats.On.To.Fly
Lot's of experienced FIs leaving, to be replaced by fresh student graduates in 16 months time, what could go wrong.
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2 year bond to repay 115k, be interesting to see how that got by finance.

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The bond would be totally unenforceable in that case. What will they do, repossess your instructor spec 2006 Corsa?

Two years instructing isn’t the end of the world, given you get the MCC etc you’ll be ready to walk into the blue and yellow 737 the second that bond expires.
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Old 6th Nov 2022, 18:34
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Originally Posted by VariablePitchP
The bond would be totally unenforceable in that case. What will they do, repossess your instructor spec 2006 Corsa?

Two years instructing isn’t the end of the world, given you get the MCC etc you’ll be ready to walk into the blue and yellow 737 the second that bond expires.
Oh don't get me wrong, that is a great deal for the students and there will be massive competition for those 6 places. Pretty cushty for a 2 year bond, airlines used to do 4+ years for a 30k type rating.

I just don't understand it from the business side. Leading Edge apparently couldn't pay their bills recently, and just opened a fair weather base and so have all the costs associated with that. It just doesn't add up.
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Old 6th Nov 2022, 19:21
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Originally Posted by Hats.On.To.Fly
Oh don't get me wrong, that is a great deal for the students and there will be massive competition for those 6 places. Pretty cushty for a 2 year bond, airlines used to do 4+ years for a 30k type rating.

I just don't understand it from the business side. Leading Edge apparently couldn't pay their bills recently, and just opened a fair weather base and so have all the costs associated with that. It just doesn't add up.
It definitely doesn’t add up if you think of it as them paying £115K. Reality is that includes VAT for customers paying it, so we’re straight away down to £95K. That’s got a load of margin in, can’t be costing them much more than £60K to actually train them. Which will have some obscure tax write off built into it. It’s got the BSc thing, all sorts of stuff they can play.

Huge amount of free advertising, charging lots of people for assessments.

On balance though, I still can’t knock it. There will absolutely be people who get licences who otherwise couldn’t, and that can only be a good thing.
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Old 6th Nov 2022, 19:33
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Originally Posted by Hats.On.To.Fly
I just don't understand it from the business side. Leading Edge apparently couldn't pay their bills recently, and just opened a fair weather base and so have all the costs associated with that. It just doesn't add up.
The new base is a fairly derelict Spanish airfield with little infrastructure, probably a fairly good deal was done with the local government who will do anything for a drop of investment.

As for the programme, At a minimum with 1000 applicants to this scheme it is likely that Leading Edge will make enough in assessment fees to cover half the programme's cost, take on some others who will likely go whitetail anyway at their own expense and LE haven't really reached far into their pockets at all. Some would say it's more of a lottery.
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Old 7th Nov 2022, 07:22
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The last few years have been brutal for people wanting to fly for an airline in Europe. Most recently Covid and now the war in Ukraine have additionally left a number of highly experienced pilots high and dry. I know several who have become train drivers. Others like myself have retired. Two I spoke to in the last week are now in successful business careers and fly for fun, both have ATPLs. I am hesitant to conclude that things are looking up, because the inevitable economic hangover must dampen demand. But I am nonetheless intrigued when a jobs upturn will occur here as it undoubtedly has in the US. I am interested if anyone has any data on the current situation. To prime the pump I had a look at ATPL theory exam passes over the last 20 years here in Germany. Not surprisingly the numbers appear to have more than halved over the last 20 years. This is hardly surprising if jobs are hard to come by and the cost of training is over €100K. You can obviously save some by following the self improver route, but it is still a big perishable investment. Does anyone have an overview on number of pilots required versus current output?
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Old 13th Nov 2022, 20:34
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Don't forget the old saying, "there is no such thing as a free lunch"....

BCFT (a long established and quite respectable UK school) recently went bankrupt recently so beware of 'free' offers. No flight training school could ever afford to give away such vast sums. It is clever marketing for sure. Leading Edge state on their website they are willing to give away almost 700,000 pounds in free courses, this cannot be sustainable for any ATO. They will have to fund it with either an incredibly large number of people paying for the assessment, highly improbable, or the scheme will ultimately collapse. As the previous posters suggest, if you were one of the lucky ones I guess it could be looked at like a 300 pound lottery ticket, however, the catch is you have to pass. Cynically, one could imagine the free courses will only be offered when enough have paid! Furthermore, there are bound to be lots of legal clauses which will allow the school to get out of the commitment at any time, just as L3 did when Covid hit, so perhaps it's not quite like winning the lottery.

The history of flight training proves beyond any doubt that profit margins are often slim and companies fold quite frequently. Its also true, some that collapsed were due to dishonesty of the owners....pocket your money and run! The so called 'big 3' maybe able to fund aggressive advertising and marketing campaigns and can take larger risks because they have the financial backing, nevertheless, as history has proven, when they fail to produce the profits demanded by investors, things change quickly and students are left hanging.

The sad thing about flight training is that it takes a lot of investment and a lot of energy to make and sustain a long term business. Often too many schools chasing too few customers, boom to bust is the norm, pilot demand fluctuates and the training industry goes up and down with it. Potential customers are often bewildered by opinions, by the choices, the arguments about the best way forward (modular vs integrated being the big one) and sadly, there are still too many less the honest school owners trying to get their piece of the pie.

My message has been consistent, along with many others on this forum. Airlines will take you if they need pilots and you are up to the task (well trained), so: go modular, keep control, don't pay all up front, don't be dazzled by big is best and don't pay over 100K when you can get it all for 60-70% of that cost, and finally, don't fall for promises which are often smoke and mirrors and clever marketing (lots of schools are trying them), and remember, freebies always cost money someone ultimately has to pay..

SJ
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Old 14th Nov 2022, 13:23
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Originally Posted by spitfirejock
BCFT (a long established and quite respectable UK school) recently went bankrupt recently so beware of 'free' offers.
As a point of clarification, as I understand it, BCFT didn't enter bankruptcy. It ceased to trade, reimbursing impacted parties, including cadets.
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Old 14th Nov 2022, 22:24
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Originally Posted by jez d
As a point of clarification, as I understand it, BCFT didn't enter bankruptcy. It ceased to trade, reimbursing impacted parties, including cadets.
I did not make any comment about whether they owed money to anyone, I do not know. I have heard 'rumors' (this is a rumor network after all) they do owe several hundred thousand to 'creditors' although I don't know who these might be, students or suppliers?, your guess is as good as mine.

The point was, schools come and go and my concern is more about the slim margins in flight training, BCFT would not have ceased to trade, one assumes, if they were making decent money!

SJ
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Old 30th Nov 2022, 13:22
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BCFT

As I understand it the liquidators were in BCFT two weeks ago.

Rob
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Old 11th May 2023, 18:46
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After Tayside going into Administration-who is next?

The Commercial Flight Training market is I feel set for some big changes VERY a soon.
With the demise of Tayside in Dundee a few weeks ago, the student funds paid up front to the company, the administrators think totalled around £600,000 and that money will never be returned to the students….they will be lucky to get their training records. Pure bad management even though the owner did invest a chunk of cash.
So who is next on the list? There are a couple of very likely candidates I’m hearing. If you look at the FTA accounts they seem to have just been restated so there seems something wrong there as the figures are really strange. Most of their aircraft are grounded and word is their maintenance operation is unable to get credit I hear. They certainly may have in excess of £3m of debt and undoubtedly insolvent it would seem. Their accounts are very poor and can have only got worse since last year with only the odd one or two aircraft flying. In my opinion insufficient income to sustain it but stranger things have happed and an investor with a few grand might pop up but I doubt it.

Then if you look at the accounts of Leading Edge, they are totally funded by student debt it would seem as they show 2 years ago millions in money they have in deferred income (money taken from students but not used for training them). At the end of March 2022 they were £8.5m in debt and undoubtedly insolvent. Of that £8.5m, £6.2m of it is deferred income from the students. For anyone
not grasping these accountancy terms, that means that IF it went bust today, all the students there would
lose every penny as there are no assets as they are all mortgaged it seems.These people there seem to be taking around £25-£30k from each student IN ADVANCE so that money is always used to fund other things in the company. This is NOT good news. Its also common knowledge that they are really struggling to pay debts on time and this is a big red insolvency flag.
I think anyone throwing money at either of those schools is asking for
trouble. They all ‘talk the talk’ at these Pilot Career shows but NON of them
ring fence or escrow the money students put in. When you put money in you will NEVER get it back.
The CAA I am told do NOT consider the financial solvency and business plans of these Training Schools. Crazy. When more go bust the media will have a field day with this.
I fear the worst for many students over the next few months and I really do think something big is about to happen.
If you are considering commercial training, go and ask the students there where you want to train, ask around, ask the instructors but don’t ask Management as all they want is your money to fund their businesses. Be aware, don’t get hooked on promises and the emotions of becoming a pilot. Look after your money and that of your parents and relatives carefully. Happy Flying Training.
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Old 11th May 2023, 22:56
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A perceptive post. It is the case that most integrated schools' cash flow relies entirely on new students arriving and paying up front. In other words when you lay down your £100K at the start of the course it is paying for fuel / maintenance / leasing costs for the senior courses. When this stutters...bang. School goes bust and every single customer in the training pipeline loses all their money, which is often secured against parents' houses, and the dream ends. The consistent message is do not pay more than a couple of grand or so up front for flying training, which basically means avoid nearly all integrated schools. There are plenty of good modular flight schools that will train you better, for less money, and not take your cash up front.
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Old 12th May 2023, 12:41
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I agree with AW, I have the very same perspective. Question for him and all, why is it that so many students continue to fall into the same mindset (trap) despite the many posts on this forum and others advising them not to?

Might we all conclude we are simply wasting our time using this forum to give advice? If Leading Edge really have 6.2 million in student pre-paid funds at their disposal, that is insanity and clear indication sanity has lost the argument. I guess its a bit like politics, if your left wing you don't agree with right wing and vice-versa and there seems nothing we can do to persuade people to change.

As nav3 states, we are likely going to see big changes very soon, and the cycle will start all over again!

My concern is not just the losses students may have to endure, is the harsh fact (and I have posted this before several times), choice is becoming limited, costs are soaring, aircraft, people, fuel, maintenance etc, and the very big schools might be the only ones that can survive reducing choice further making flying elitist again and only accessible to the few based on wealth, like it was in the 70's!

SJ
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Old 12th May 2023, 13:20
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In my experience it is perfectly possible to start up and run a small/medium flight school but you need to have sufficient working capital, and this has to come in the first place either from industry investers or from the shareholders themselves. The problem is that without any effective regulation it has become the norm for mid-sized flight schools to start up and to continue to operate without adequate working capital, just using students' up-front payments to fund the training of the courses in front of them. It is easy to spot a flight school that does this - they are the ones who do not allow pay-as-you fly. Any ATO that requires up-front payments of any size should be avoided like the plague because they obviously and evidently have cash flow issues, otherwise they simply wouldn't need to do it. They are the last people you should give your life savings to.

Note that of the two ATOs mentioned above, FTA have recently slightly moved away from this model and have launched what they call a 'fair fees' strategy, although even this requires £25000 to be paid before the end of the theory phase, still a lot of money up front.

There will almost certainly be more flight schools following Tayside into liquidation. Credit is getting tighter, the banks less forgiving. Please, please do not pay large sums up front, go and fly somewhere else. Please do look at the accounts on Companies House, you can verify that @nav3's post above is factually correct. The risk is real.

Was talking to Anthony Petteford earlier today. He reminded me that, after a series of similar scandals in Australia, flight schools there were required by CASA to keep student advance payments in escrow. We need that here.
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Old 12th May 2023, 19:14
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Both spitfirejock & Alex raise some very valid points & I agree payments should be made via escrow accounts. If possible pay any money via CREDIT card (not debit) as under section 75 of the UK Consumer Credit Act you have some protection up to £30,000, however not many wannabes will have a £30K limit.

Looking at Companies House accounts can give some idea of what is going on but these can be nearly 18 months old (legally) so don't necessarily give the true current situation, always look at outstanding charges as these lenders will have priority after HMRC should default arise. It is usually actual cash at bank that determines whether a business can continue or not. Rumours of regular late payment to any creditors (including its staff) should have alarm bells ringing (remember Cabair).

Like nav3 I have a big issue with the UK CAA washing it's hands when it comes to a flight school's financially stability, yet it is responsible for appointing 'suitable officers or account holders' - have a read at the May 23 edition of Pilot magazine where the CAA appears to be in breach of it's own regulations regarding a flight school at Halfpenny Green (sorry Wolverhampton International) where several PPL students with upfront payments are left with nothing despite lots of warnings & complaints to CAA.

As sj, Alex & many others including myself have stated on this forum Modular & pay as you go is definitely the safer option.

Question - how do you make a small fortune in aviation?
Answer - start with a large one.

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Old 17th May 2023, 13:24
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The last few posts make dire reading. As an Accountable Manager of a CAA and EASA ATO it is sickening to see (published Companies House accounts) how the ATO mentioned in previous posts has geared its business. On the face of it, nothing short of a ponzi scheme.

Two points that stand out to me;

Firstly, an Accountable Manager (the main post holder within the ATO), in accordance with Part ORA, is responsible for 'the management of all financial and budgetary matters' Therefore, if deemed necessary the regulator should interject. The reality and history shows that this does not happen. It is also required that in accordance with UK Government law that directors hold fiduciary duties of responsibility - this means the company must remain solvent!

Secondly, in my opinion, Pprune is a bit of a dinosaur now a days. Prospective commercial pilots do their research mainly on Instagram. The ATO mentioned above seems to be a master of Instagram marketing and therefore can maintain throughput (and cashflow).

Until the front of the 'machine' (new student intake) dries up, the ATO will continue to pay Peter with Paul. With the industry gathering good traction at present, it will take for a more public medium to have such effect.
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Old 18th May 2023, 21:55
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The airfield appears to be privately owned. That IS a fact. Nothing to do with Spanish Government. The Ops building is a 20ft Portacabin.
The previous ops manager was a convicted Venezuelan paedophile who has now disappeared when found out.
They don’t have any maintenance down there I heard and can’t get instructors legally as neither the students OR instructors have Visas. They also are being heavily investigated by the CAA due to 4 major safety incidents now in less than 2 years I’ve got someone who knows of it.
Leading Edge will follow Tayside and that one down South feel very soon I reckon.

Leading Edge owe their students a LOT of money. I heard in their accounts at end March 22 it was over £6m I read somewhere. Must be and other £2m by now. One Spanish student going legal to recover his money. Big fans there and lots of Number 2’s it seems very soon!



Originally Posted by planesandthings
The new base is a fairly derelict Spanish airfield with little infrastructure, probably a fairly good deal was done with the local government who will do anything for a drop of investment.

As for the programme, At a minimum with 1000 applicants to this scheme it is likely that Leading Edge will make enough in assessment fees to cover half the programme's cost, take on some others who will likely go whitetail anyway at their own expense and LE haven't really reached far into their pockets at all. Some would say it's more of a lottery.
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Old 18th May 2023, 22:06
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Clarification Spitfirejock…….They do NOT HAVE the funds ‘available’. It is a balance sheet creditor……..they have spent/squandered/used……..insert any other word that fits. They ARE MASSIVELY insolvent. Accident waiting to happen and then every month another 15 students hooked by the emotional journey and the skill of the conmen turn up with £30k down payment BEFORE Groundschool and wonder why they’ve gone and lost the lot. 🤷‍♂️
Only happy people are the Directors…..survived to fight another month until the next lot of unsuspecting candidates arrive.

Originally Posted by spitfirejock
I agree with AW, I have the very same perspective. Question for him and all, why is it that so many students continue to fall into the same mindset (trap) despite the many posts on this forum and others advising them not to?

Might we all conclude we are simply wasting our time using this forum to give advice? If Leading Edge really have 6.2 million in student pre-paid funds at their disposal, that is insanity and clear indication sanity has lost the argument. I guess its a bit like politics, if your left wing you don't agree with right wing and vice-versa and there seems nothing we can do to persuade people to change.

As nav3 states, we are likely going to see big changes very soon, and the cycle will start all over again!

My concern is not just the losses students may have to endure, is the harsh fact (and I have posted this before several times), choice is becoming limited, costs are soaring, aircraft, people, fuel, maintenance etc, and the very big schools might be the only ones that can survive reducing choice further making flying elitist again and only accessible to the few based on wealth, like it was in the 70's!

SJ
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Old 19th May 2023, 13:24
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Originally Posted by RichardH
Both spitfirejock & Alex raise some very valid points & I agree payments should be made via escrow accounts. If possible pay any money via CREDIT card (not debit) as under section 75 of the UK Consumer Credit Act you have some protection up to £30,000, however not many wannabes will have a £30K limit.
Just to add to this, I believe any claims under section 75 must be raised within 120 days; something to bear in mind when putting down money in advance of a course.
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Old 20th May 2023, 19:36
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Some excellent follow points being made here.

Surely now is the time for the UK CAA to be formally asked to review these company's accounts and make some policy changes? The CAA are bound by solvency rules and their own financial people could easily make an appropriate assessment of any ATO. Alex W, any thoughts? Maybe your own group could draft a formal letter requesting a review? If the CAA continue to fail to act, could they be sued? I believe they would have to show their response to any such request publicly, am I wrong?

I strongly believe the industry is better served with large number of smaller schools (hopefully well run by enthusiasts) each of whom would be ecstatic to have 15 students with 30K to spend. I fear we will see the opposite, larger schools taking most of the spoils whilst business is booming and then running away when the market collapses.

We can but try....but I don't think we are being listened to, Rob Howarth is probably right, they are all looking at Instagram!

SJ
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Old 20th May 2023, 20:43
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Wasn't there a flying school on the south coast which, in the 1990's, was told by the CAA to stop accepting new students due to not being economically viable?
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At work I've driven past Hamble a few times recently with colleagues and we discussed the times when student pilots didn't have to worry about losing their money due to their flying school becoming insolvent.
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