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Credit Crunch effect on the training industry

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Credit Crunch effect on the training industry

Old 15th Oct 2008, 11:33
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Credit Crunch effect on the training industry

Hi all

I know this was discussed quite a while back but just wanted to see peoples up-to-date views on the effect of the current economic crisis on the helicopter training industry...

It was mentioned a while back that training costs may come down due to the lack of loans available which in turn would reduce the number of students paying through the nose, this would then force the various institutions to reduce their training costs in order to attract more students. Is this really a possible conclusion?

Will they go bust because they don't have enough students?

Also would costs actually come down considering the supposed shortage of fuel?

Any comments would be much appreciated.

Thanks
Simon
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Old 15th Oct 2008, 11:44
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I can't see how training organisations can cut costs. Maintenance charges are going to go up due to the new ARC regulations.
More likely you are going to see fewer training organisations or smaller ones.
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Old 15th Oct 2008, 11:48
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Agreed. Training schools are more likely to go bust.

Cheers

Whirls
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Old 15th Oct 2008, 13:19
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"due to new ARC regulations"

we are in the process of moving to non-expiring certificates of airworthiness, the new ARC ( replaces the C of A) can be issued by those with subpart H approval.and can be processed electronically.....................
Why will this lead to increased Mx costs????????????

Curious Mk10
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Old 15th Oct 2008, 14:24
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Some firms are already asking for 2,000 up front to cover the extra paperwork. The final submission to the CAA maybe electronic but there is more paperwork involved for the maintenance organisations. Added to this if you aircraft is not kept in a controlled environment then every year the CAA will have to renew your ARC. This will not be cheap as their hourly rate is 180 per hour. Do you think they will complete the review of the paperwork quicker than a maintenace organisation?
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Old 15th Oct 2008, 15:11
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Glad someone else has started a post to get up to date views. I did a post about March this year asking whether there had been a noticable slowdown in UK onshore training and charter.

The answer is a simple yes. I used to average 80 hours a month, even in the winter, when I would rope my students into structured groundschool. Alas, I would estimate that I personally am 25% down on last years work. The school as a whole probably down 40%.

We have seen a reduction in our fuel costs recently, as suppliers have cut their costs, but unless we start getting more students through the door, and more importantly trial lessons, then I can't see it being long before we go under.

Servicing costs are getting rediculous, and hangarage isn't making enough to pay the mortgage on it. I'm a self employed instructor who works for the school so unfortunatly have no say as to how the place is run. There will be more schools going under soon if the economy doesn't improve quickly.... remember - winter is just around the corner! Think I'm going to be getting a second job shortly!

RV
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Old 15th Oct 2008, 18:12
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vital
"Anecdotal evidence from Ireland says the training sector is completely dead over there. "

Is this true? I know between weather this eummer and economy that things may appear slower but i have spoken to couple of operators who claim to have the bookings but losing out because of cancelations due to weather. Sad if it is true. I do pity ant power by the hour instructors this winter

NB
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Old 15th Oct 2008, 20:36
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So is there an opportunity to negotiate costs with schools?

As a PPL(H) whose licence has 'lapsed', I am now in the financial position to get 'back in the saddle' Is this therefore a good opportunity to come along with a 10k for example and negotiate a better hourly rate?
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Old 15th Oct 2008, 20:41
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I have had to postpone my PPL for a while until the fuel prices come down and the lessons go back to the pre fuel increase rate.
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Old 15th Oct 2008, 21:22
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I know between weather this eummer and economy that things may appear slower but i have spoken to couple of operators who claim to have the bookings but losing out because of cancelations due to weather
Yea the weather is brutal here at the minute in ireland, i have seen dam all robbies up since i came back from florida.. I still haven't got flying myself and dout i will be flying before xmas.. Im in the construction myself and im feeling the effects now, isn't nice
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Old 16th Oct 2008, 14:18
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Bang Stare Red said:
So is there an opportunity to negotiate costs with schools?
I think you'll find the common consensus of opinion is that paying in advance is a high risk strategy to save (probably) only a few quid. In the current climate it's an even higher risk.
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Old 16th Oct 2008, 15:19
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If you're gonna pay up front, the savings that you'll negotiate probably won't be enough to warrant the risk. It seems like a lot of these school's backs are against the wall. If someone does offer you massive savings in order to get your money up front, there's an even greater risk that you won't get your full value for money as the school may not be there to give you your hours.
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Old 16th Oct 2008, 16:50
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Don't forget just one hour in an R22 will cost around 300.
I take it some schools have increased to 300 Per Hour around the UK?? Still 280 Per Hour here, 220 SFH!
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Old 16th Oct 2008, 19:59
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Fuel go down, I wish.

Knievel, if you are waiting for the fuel prices to go down so the hourly rate goes down to something like it was say 6 months ago then you may be waiting a long time. It is not often that fuel goes down that much. Inflation has been recorded at 5.2% so I would not expect much more off of an hourly rate. Even if fuel prices went down enough to reduce the hourly rate by say 15 then I am sure the schools would only reduce the actual cost of an hour by 10 for instance.

But good luck. We all need a cheaper hourly rate.
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Old 17th Oct 2008, 20:30
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Our rates went up 10gbp earlier this year, mostly due to fuel cost increases, but I doubt they'll ever go back down again due to the various other economic pressures abound these days.

Equally, I don't think you'll see any real negotiation with schools for the most part, many are making minimal profits on current prices. After all, it doesn't matter if you came and offered 50 grand if it costs us 55 to provide the aircraft and pilot...
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Old 22nd Oct 2008, 20:26
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Vital Actions.......good point......if only I could sell my Lotus then i'd be back on track in money terms anyway!
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Old 23rd Oct 2008, 09:29
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This is surely going to greatly reduce the number of new pilots around the world and in turn create a pilot shortage and perhaps an increase in salary?
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Old 23rd Oct 2008, 18:59
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PPL(H)

Knievel

So what model Lotus? ... talk nicely to me and on the basis you are half way through an R22 course, AND you can take fourteen consecutive days off (less weekends) to be at Shoreham AND you are reasonable on the controls ... we could offer training at 275 plus VAT (rotors turning) on an Enstrom 28A model.

You work hard evenings on the ground school and I'll get you qualified in three weeks.

I might also make a reasonable PX offer on the car if it is a classic or near. PM for more detail.

Dennis K
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Old 23rd Oct 2008, 22:19
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Blimey Dennis, now that is an offer worth considering......leave it with me to give it some thought!

P.S. It's a pristine 2001 Lotus Exige Series 1 with only 11,000 miles on the clock, one of only 301 UK hand built models produced and is undoubtedly the best remaining example in existence!

Thanks Dennis.
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Old 24th Oct 2008, 10:31
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simond

I think the opposite may actually happen. Companies will fold and more and more qualified pilots will be looking for work.

Look at the fixed wing world where some large carriers have gone out of business and other operators like Ryanair are cutting back their services and enforcing unpaid leave on their pilots.
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