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Cathay Pacific Cadet Pilot Programme

South Asia and Far East Wannabes A forum for those applying to Cathay Pacific, Dragonair or any other Hong Kong-based airline or operator. Use this area for both Direct Entry Pilot and Cadet-scheme queries.

Cathay Pacific Cadet Pilot Programme

Old 17th Sep 2011, 16:33
  #3141 (permalink)  
 
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GJS

That question has been answered many times before, and it's no. CX used to offer overseas bases (excluding housing allowances) so that it would save costs, but now there is no need for that any more with us iCadets, maybe for the senior guys perhaps. You best be looking to spend the rest of your career with CX in HK. Some of us got into the CX CPP knowing what we were getting ourselves into, and I suggest you do the same. Hope that helps answer your question.

Em77W
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Old 17th Sep 2011, 23:55
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Em773ER

I think he is referring to commuting rather than being based. As an SO it is possible but highly unadvisable, especially from North America where the loads are always high and the chances of not getting on as staff travel are very high forcing him to regularly purchase full fare tickets. Failure to be in Hong Kong for a duty is potentially a sack able offense. He also needs to consider that he will be treated by the Canadian tax authorities as a Canadian resident for tax purposes and also the Hong Kong Inland Revenue Department as a Hong Kong resident for tax purpose, potentially paying double taxation.
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Old 18th Sep 2011, 05:52
  #3143 (permalink)  
 
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Em773ER

You are wrong i am talked to my friend is S/O for CX via cadet he is told me bases for S/Os are opening in few years he is already look to buy house in the country he is want to be based in. Does anybody knows if CX have ever ever based S/Os in germany?? Ok thanks. Stage 1 next week wish me luck friends!!
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Old 18th Sep 2011, 07:26
  #3144 (permalink)  
 
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CX-A330

Your friend, with all due respect doesn’t know what he/she is talking about. CX has never offered permanent bases to SO’s and never will. If fact there is a very strong argument that permanent bases to all ranks is a thing of the past considering the legal mine field the company has found itself in since on shoring bases and the fact many bases now cost the company more, particularly for new hires, than a Hong Kong base.
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Old 18th Sep 2011, 11:17
  #3145 (permalink)  
 
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Forgivable Loan

I would like to clarify exactly what the forgivable loan is.

I had been under the impression that it merely represented the cost of training at FTA Adelaide. So, my first understanding was that a cadet with zero flying experience will be lumbered with a $1.1m HKD training cost, which should they leave before 6 years of service the cadet would be liable to pay, however the training cost/forgivable loan will be 'forgiven' after 6 years of service. So therefore by partaking in the cadet training you are effectively bonded to give Cathay at least 6 years service.

The more I read on this and other threads, the more it sounds like this is not the case at all and the forgivable loan is simply a 'joining gift' from Cathay upon being hired as an SO which is effectively yours and a 'gift' rather than a loan as long as you work for Cathay for at least 6 years.

Can someone tell me which is correct?

Also, what is the tax situation. From what I gather, you are taxed on the whole amount once the loan is 'forgiven' at the end of your 6th year of service. Am I right? If so, that sounds fair enough to me as it is money you are being given after all, much like your monthly salary. I can see how it may be hard to pay the tax bill without having purposefully planned and saved for it though. If, however the forgivable loan is merely the cost of your FTA training, then this would mean you are paying tax on the money Cathay pay to train you, which is definitely a bit sneaky of them.

Thanks!
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Old 18th Sep 2011, 23:37
  #3146 (permalink)  
 
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Wallstreet
Do you think the upgrade time will actually increase to 6-8 years ? Carriers all around the world are ordering extra planes, those need to be filled with crews.
Most of CX’s orders are replacements of older aircraft, i.e. B744, A343, older A333 and older B777. In the last 18 years upgrade times for SO's has only got worse, even during times of expansion.
Yes they might employ DEFO's but when the demand gets high will they not upgrade SO's faster too ? There might be a pilot shortage in the next decadeh
If the demand gets high it is even more reason for CX to hire DEFO’s. CX is sector limited in its training, i.e. they don’t have enough flights to do all the training they would like. Hiring DEFO’s halves the number of training sectors required to fill the seats, one DEFO course as opposed to an upgrade of an SO to JFO and an induction course for a new SO to replace him.
Is it possible Not work from HK base / plans for opening any other basis ?
Please read my post at #3264. Simple answer is no.
Do you think the BA cadet program is better, or what would you consider a good alternative ?
I couldn’t make a comment on the BA cadet scheme as I am unfamiliar with it.
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Old 19th Sep 2011, 01:59
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Yea, I'm also wondering about the forgiveable loan. If you were to be taxed on it, would it be possible to not take the loan at all or just keep some money aside from the loan to pay for the tax when it comes
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Old 19th Sep 2011, 04:34
  #3148 (permalink)  
 
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Originally Posted by GlassesJacketShirt
Yea, I'm also wondering about the forgiveable loan. If you were to be taxed on it, would it be possible to not take the loan at all or just keep some money aside from the loan to pay for the tax when it comes
I don't think you have the option to not take the loan nor leave the money aside. That money never gets to your hands. From what I can interpret with the information given, the you sign the contract acknowledging the existence of such loan given to you by Cathay and the loan is used entirely to pay for the training involved in Adelaide. Even if you have 1.1 million HKD laying around in your bank account, Cathay will still require you to take a loan from them. The loan is a mere workaround to the bonding law made by the HK government. This way, Cathay can ensure they have a warm body for 6 years without fearing that the warm body will leave any minute. As for your "1.1m 6 years bonus", a smart CPP SO will calculate the required tax amount and spread it amongst the 72 months of salary. It's a safe bet to use 15% flat rate tax than the multi-tier tax rate for that year.
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Old 19th Sep 2011, 04:40
  #3149 (permalink)  
 
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Ok, so you never actually the receive the 1.1million and it only represents the cost of the training in Adelaide! Wow!

That really does have an effect on the SO package, as the tax on that at 15% would be $165k, which is over $2k per month if spread over 72 months.

This tax is not money that CX are pocketing themselves, so I can't believe there is not another way they can think to bond people without costing them $165k!!!

We do definitely have the correct end of the stick with regards to this , yes?
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Old 19th Sep 2011, 06:27
  #3150 (permalink)  
 
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hkguy

Don’t forget you will also have to pay provisional tax on this, so effectively doubling it. You will though get this back the following year as it is a one off “bonus” for want of a better word. To budget this over 72 months you will need to put aside HK$4600.00 per month on top of your normal budget for tax.

If you are single and earn more than HK1,518,000.00 in the financial year the HKIRD will calculate your income tax at the “Standard Rate” 15% rather than the “Progressive Rate” i.e. tiered rate that has a top marginal tax rate of 17%. You are effectively being charged the lower rate of tax between the two methods.
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Old 19th Sep 2011, 07:46
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Isn't the Company forgiveable loan HK$ 1.2 Million, of which training cost (depending on which course you are doing) is taken from, and what is left over is given to you as a joining bonus, which is then taxable?

I'm flying off to HK for stage 2 later today and I will ask them, and also report on the situation regarding UK 200 hour integrated flight school graduates who are looking to join the advanced 30 week course, because I personally won't except the 61 week course and start from the beginning all over again, just doesn't make any sense.

Anyone who will be there this week let me know I will be at the Headlands till Thursday if you want to have a chat.

cheers,

Hamid
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Old 19th Sep 2011, 09:42
  #3152 (permalink)  
 
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Hamid_27
Isn't the Company forgiveable loan HK$ 1.2 Million, of which training cost (depending on which course you are doing) is taken from, and what is left over is given to you as a joining bonus, which is then taxable?
If you had to pay back the portion of the loan to pay for your flying training then this would be the case. As the whole loan is forgiven after six years of service then it will be 100% taxable. You have received a benefit in the form of a licence which you haven’t had to pay for directly until the loan given to you by CX is forgiven and that loan then becomes income. Income doesn’t have to be in the form of cash only.

As for the size of the loan I can’t tell you that but considering the Aussie dollar is so high against the HK dollar, I wouldn’t be surprised.
I'm flying off to HK for stage 2 later today and I will ask them
Personally I don’t think the interviews would know the answer to the question as they aren’t qualified to tell you. I will say though that it has been brought to our union’s attention that interviews may have been telling applicants that they would upgrade in no more than 18 months. Currently there is about 360 current SO’s waiting for an upgrade. It is impossible to upgrade so many SO’s in 18 months. When the DFO was asked about this by our union he said that all upgrades would be in seniority order and new hire SO’s wouldn’t be jumping the cue. As current upgrades are taking 4 years, it would appear interviewers may have been telling applicants what they wanted to hear in an attempt to dress up the job.
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Old 19th Sep 2011, 11:25
  #3153 (permalink)  
 
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Forgivable Loan

In the Netherlands costs for a flight training would be considered 'negative income'. If you spend 100,000Eur, you can get this back via Tax, so you wont be paying any tax untill you have reached the 100,000 but you would still have to pay the interest.

This system does not exist in Honk Kong I assume ? If it does, Cathay is not paying Anything for your training at all.

Titan, you say you will get the tax back the next year ? So you will get 165.000*2=330.000HKD back ? Or only 165.000 ? How does this work then ? Do you need to earn enough to pay 165.000 in tax that year in order to get it back, or will they just deposit it ?

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Old 19th Sep 2011, 12:38
  #3154 (permalink)  
 
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Wallstreet

You will only get the provisional tax back, i.e. HK$165,000.00. Provisional Tax is tax paid in advanced based on a projection derived from your previous year’s income. Hong Kong doesn’t have a “Pay as you earn” income tax regime where your employer collects your tax on your behalf and pays it to the government. In Hong Kong you pay the tax directly to the government in two yearly instalments, January and April.

This system does not exist in Honk Kong I assume ? If it does, Cathay is not paying Anything for your training at all.
No this system doesn't exist in Hong Kong.

If you want to get more information regarding the HK tax system, have a read of the Hong Kong Inland Revenue Department’s web site.

Hong Kong Inland Revenue Department
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Old 19th Sep 2011, 12:50
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Ok, Thank you !
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Old 20th Sep 2011, 22:14
  #3156 (permalink)  
 
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I can't see anything other than Icadets upgraded as normal when their turn comes around. The Icadet T's and C's are to lower the cost base of the tech crew group, unless DEFO's are hired on the same contract (or less!) i can't see the reasoning to go and pay more for someone else. The quicker CX upgrades Icadets to FO and CPT the lower the cost base will be.

Can any current Icadet confirm that the 'forgivable loan' is pro rata?
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Old 21st Sep 2011, 09:38
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jsmitty01

If the company was to offer anything but local terms for DEFO’s then their whole argument that the RDO prohibits them paying expat terms & conditions is blown out of the water. So yes DEFO’s when it happens will be on local terms.

Regarding cost of upgrades, one DEFO course is cheaper than one Icadet SO induction course and one JFO upgrade course. The company has done this before because of the significant cost saving factor and also because it is quicker to get qualified bums in the seats.
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Old 21st Sep 2011, 10:03
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...qualified bums in seats - yes, but hardly competent. Oasis et al springs to mind.
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Old 21st Sep 2011, 16:57
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"Do you think the upgrade time will actually increase to 6-8 years ? Carriers all around the world are ordering extra planes, those need to be filled with crews. Yes they might employ DEFO's but when the demand gets high will they not upgrade SO's faster too ? There might be a pilot shortage in the next decadeh

Demand for airline pilots set to soar - USATODAY.com"

This is a very good article and I want to thank you for providing this link. Personally I take these kinds of articles, hyping this so called “pilot shortage” with a grain of salt as I have seen stuff like this for many years. Back in the mid 90’s when I went to Embry-Riddle, their freshman recruiting pamphlets were filled with graphs and projections of how fast the aviation sector would grow and how many pilots the airlines would need. If you read some of this stuff, you would get the sense that all the airlines would need pilots so bad, they would send recruiters to ERAU’s graduation ceremony and “pluck” them as they walk off with a degree.

The reality is, there was never a real “pilot shortage”. It seems something always happened; 9/11, bankruptcies of the big carriers, rise in fuel costs, Lehman, AIG etc etc. I believe there are still a lot of challenges ahead which may not make this “pilot shortage” happen ever. For one, with the military (US) winding down coupled with more use of drone aircraft, they will need less pilots (in cockpit) and hence there will be larger pool of highly qualified pilots coming into the commercial market as the military downsizes. There will be lower growth in the economies of US, Europe and even Asia (to include China and India) in the coming years. IATA just predicted a 29% drop in revenue in global air travel in 2012 due to the global economic slow down. It seems the average consensus from economists believe the US and EU will not recover until 2015 at best. I also believe that in the distant future (maybe next 15-30 years) it maybe very likely we will see the cockpit crew reduced to one from the current two. This may sound outrageous but if you think about it, back just 10 years ago, there were quite a few planes flying around the world with a crew of three, 30 years ago, there were commercial airliners still flying with as many five (pilot, co-pilot, engineer, navigator and radio operator). Also, I am sure eventually the technology you find in military drones, will make its way into civil aircraft just like the many other technology before it (ie fly-by wire). It is amazing what automation can do at the expense of humans. Lastly, there are still pilots on furlough, unemployed pilots and tons of pilots who forked out a pretty penny so they can earn a CPL. Active pilots in US alone, 125,738 have CPL, 144,600 with ATP, I would think that is a large pool of candidates.

Now, this whole China and India and how they will need thousands of aircraft and tens of thousands of pilots a year just to fill those cockpit… The truth is, they can find the pilots they need through their military (like most countries in Asia) and they are sending their own nationals overseas for flight training and building their own flight schools/programs as well. What they will need for the time being are experienced pilots, particularly captains, people with tons of PIC time. I can assure you, once these countries fill their cockpits with the right experience and talent with their own nationals, they will no longer need any expat pilots and the expats will be the first to be let go if there are any downsizing. So basically, unless if you are a mainland Chinese or an Indian or a captain with tons of PIC times, you will not be able to enjoy the boom in their pilot hiring.

So with all this, my conclusion is, although a pilot shortage would be nice, don’t expect it to automatically happen. The airline is a very cyclical industry. In good times, the airlines make billions, but bad times they lose billions. I have a very good friend who worked as a vice president for various departments in Lockheed in past 30 years on some very neat projects (and some highly top secret and he would only give me bits and pieces of info as teaser). He said after the L-1011 flop, they did market analysis to determine if it was feasible to design and market more commercial aircraft. He ordered a study of the airline profitability through a span of a couple of decades and found that the net profit within the time frame for all the major airline was slightly negative. Another words, in simplistic terms, the study added up all the profits and minus all the losses of all major carriers within so many years and found they actually lost money overall, as opposed to many other industries (manufacturing, services, IT etc) that had an overall profit. Keep in mind too that this study was done around early 80’s when airlines had a better margin not the cut throat environment it is now. So even if you do see some signs of a pilot shortage, pilots being hired at a “record” pace, remember, the bad times will come for the airlines like it always has. It is a matter of when, and when it does, this “pilot shortage” will never matter.
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Old 1st Oct 2011, 23:59
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Package for 1500+ ATPL candidate

G'day mate, I was wondering if u could send me the package that was offered to u.

cheers
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