Airline bonding and redundancy

[neilcharlton]

I was just wondering about these schemes set up with banks and airlines . Things like netjets , flybe etc.
Airline offers you a job , airline helps you secure funding with XYZ bank to pay for ab / app training or type rateing . You are then bonded to the airline for X number of years until that cost is repaid.

What happens if you are made redundant, is the debt still in your name ?

[Baron buzz]

It depends....

You need to be very careful with bonds and training costs. My current company i fly for bonds me for £15k, this bond is not with a bank but is a signed agreement with the company. Therefore if i was made redundant i would not have to pay. My last company set up a bonding agreement with a bank, so if i left, the agreement was nothing to do with my employer, simply an agreement with the bank. This way meant that it appeared as debt when it came to getting a mortgage etc.

THe last way is paying for your rating upfront. This is the easiest for the airline, since if you leave or are made redundant you have already paid up so you will get nothing. Risky big time. The best situation is of course the one at the top, but you will not find many like that around, and certainly not as a first job!

Hope this helps

[neilcharlton]

kind of ... how does this deal work with HSBC
http://www.oxfordaviation.net/netjets/nj_info.htm

i train, i bond , the airline gets rid of me , who would pay ?

[RSinha]

With these schemes, you're only bonded for the cost of the type rating, not the cost of the training.

The loan is permanently between you and your bank, and you'll take it wherever you go.

As for the cost of the type rating, you're contract will stipulate how much its for (15-20k typically), and over what period, including details of how it reduces with time. Should you leave within said period, you would be liable to settle the remaining balance.

If you were made redundant during the bonded period, it would, I suppose, depend on whats written on your contract regarding the bond, but I would assume (with legal expertise sought) that clearly if you were made redundant, they would struggle getting any money from you, even if there was an ambiguity in the contract.

With these schemes though, the training loan will remain with you...

[Pilot Pete]

I can confirm that if you have a 'bond' for your type rating costs, then if made redundant you are free from any commitment. This happened to me post 9/11.

If you are on the new generation of 'loan', then as pointed out if it is an agreement between you and a bank, then you will still be liable for any outstanding debt.

PP

[neilcharlton]

thats great thanks , i knew there would be a catch somewhere.
I can't understand how kids can borrow 50k - 100k in the hope of getting a job. Then the lucky ones borrow 50-100k in the hope they will have a job for the next 8 years to pay it off.

[RSinha]

Its not really a catch, speculate to accumulate, and all that..

Its fair game taking the loan with you, but as far as I'm aware, the largest loan the bank will give you is £50k secured, and £25k without security.

[The_Fat_Flyer]

Depends on the airline and the contract.

I am bonded to the airline for the TR for 2 years and £12k (total cost is £18k but the airline absorbs the rest). This decreases by 1/24th for each month you serve. Only liable for it if you leave on your own or get fired - gets written off if they make you redundant.

Also getting tax free repayments to pay off my loan for 7 years. My loan from the bank, nothing to do with the airline, but similar deal in the contract. If I leave, it's my problem, if they make me redundant, they keep paying me the allowance for the loan repayment.

I agree with RSinha - speculate to accumulate. Always better to have a conditional offer when you take the loan out than none!

[winkle]

lets stop this bonding issue. either you pay for your own type rating or the company does. and thats it. anyone out there looking to leave their company who have a "contract" bond then my advice is walk away. let them come after you and if you get asked in your next job interview if you have a bond then tell them the truth tell them what you think of bonding, slavery and fuedalism. the word itself is disgusting and is a disguise for modern day slavery of which i am going to try my best to get rid of.
I would have been mocked a few hundred years ago for making comments against the slave trade but here we have in the present day a thinly disguised slavery in which the unions is to weak to speak against.
i only wish that english was my first language so that i could fight this ridiculous situation we are now in.
mr very angery from north of the border.

[RSinha]

Stop the bonding issue? Slavery and feudalism? What utter rubbish.

I think its perfectly fair for a company that is good enough to pay for your TR (given the fact that some companies make profit on your training!) expects a return of service, to offset their investment in you.

Lets not forget that a military pilot has a 12 year commitment in the UK, or 16 in some instances.

When you say 'let them come after you' in a vigilante fashion, maybe you forget that such (perfectly reasonable) bonds are legally binding. Your unique and idealistic view would get you laughed at when the legalities kicked in. Not to mention the fact that I'd guess no airlines would touch you with an 'unspent' bond, due to possible legal complications unique to you, and indeed the fact that the VAST majority of airlines who pay for your TR expect a bond too, so you can guess what they would likely think of you.

Or would you leave an airline under a bond, to another airline whereby you would be required to pay for your next TR?

Paying for a TR (rightly or wrongly) is a fairly modern practice (in todays scales, at least), bonding is most definately not.

[winkle]

Twas 6 years R of S for the Mil post OCU this was after the multi million pound scheme coupled with the laws linked to military service. these laws prevent an individual from opting out when the guns start firing.
Now of course the airlines want you to stay after THEY have paid for your type rating and quite rightly, however, there are plenty of circumstances that cause people to change their minds. (I think they call it a cooling off period). It is when you have after a few years down the road realised that things arnt quite working out and the only option is to leave the industry. what does happen then, do they send the bailiffs round or do they take you to court and then throw you in a debtors prison. yes i realise that you may never work again for a major company certainly not one with a bonding policy.
would you not prefer a system whereby there was no bonding because the company you worked for and the job you did so good that you would never contemplate leaving.
As for slavery or fuedalism maybe i am using too strong a word here and we will just use the term bonding, just look up the meaning in the dictionary.
I am amazed that you condone bonding of any sort you must be in management or own the company.
to put it simply my personal viewpoint is that bonding is modern day slavery.
open your eyes you might see a bit more of the world around you.

[RSinha]

When you said; a few years down the line things aren't going as expected, and you implied that the only option is to leave the industry.. That too is a fairly unique situation, and I cannot see the industry altering its policy on the merit of something which applies to what is an insignificant fraction of the work force.

Would the bailiffs come knocking? They would have every right to. A contract of employment is legally binding, and should they take you to court after defaulting the term of the bond, you would not have a leg to stand on.

Would I like a company whereby there was no bond? It would be nice. Are there any? Well as far as I know, BA don't bond you. Thats the only one I'm aware of. All very idealistic, however, and I'm fairly certain that all but the smallest minority (ie. you) have no problem with the principle of bonding. Furthermore, at the start of your last reply, you agreed with the idea.

Thanks for the heads up and advice at taking a look at the world around me. I'll take that on board. Not sure what you mean by it, but I'll do it anyway.

Maybe I own a company or I'm management? My company is merely an offshore investment vehicle to protect my many, many millions of pounds from Gordon .

Perhaps not, but maybe one day!

Your amazement at my condoning bonding really is proof that you need to take a good look around. It's nothing new, it's well within reason, and its generally percieved as a perfectly acceptable means of reimbursment for a costly investment made in you.

There are one or two bonding/line training schemes that we all know about, which are so convoluted, the wool is pulled over most everyones eyes, but they are few and far between, and they require a financial outlay from the pilot too, so they are irrelevant in this argument.

Take a look around the industry, and take stock. In an ideal world, things would be different. Sadly, there's no such thing. Short of BA, you will need a bond unless you pay the TR. Stop making embarassing statements comparing and airlines TR bond with slavery, because it makes you sound desperate. Look up slavery in a dictionary. If its no different to being an airline pilot, then you won't mind switching over .

[winkle]

i obviously dont come across very well, i might be wrong but financial bonding is a fairly new thing in this industry i may be wrong and am happy to be put right. i am fairly new to the industry and always thought that there was no need to hold people because the T & C of most of the companies were so good that it wasnt even considered. now that we have the locos etc and that life isnt so cosy anymore means people want to move around more often as the grass is always greener else where.
the other aspesct of all of this is when your T & Cs change ie go against your contract do you then have any legal recourse.
as an aside i am quite happy with the company i work for but want to push the principle of the bonding issue as far as possible.
there have been some excellent threads and some enlightening ones about eu law and bonding and so far there are lots of different viewpoints on it.
what if you get fired or fail line checks etc, how do you pay the money back, you probably wont get a loan without a job so its a bit of a vicous circle. your view point.
ttfn

[RSinha]

Bonding has always been around, Winkle.

It was especially valid prior to 9/11 due to the way many airlines conducted training; ie paying not only for the TR, but for the cost of training in its entirety. Back then, when T's and C's were supposedly all the more cosy, there would be an even greater recourse should you default the conditions of the bond, ie you would potentially be required to reimburse a far larger pot of cash.

If you fail your base/line training, or get fired, then the recourse will be stipulated in the contract, but from what I am aware with most companies, you will not be liable for the training costs. Similarly if you get fired, I believe. Clearly this puts pressure on the airlines to select suitable candidates.

The grey area, as you pointed out, would be if the T's and C's change, therefore substantially altering the contract. In such instances, I would assume each case would be on individual merit. The likelihood would be for a new contract to be issued detailing the new conditions, and its up to the pilot to accept or decline. Possible recourse to someone who refuses to sign it would be to get fired, in which case, the bond may become void. I would assume that if you accept new T's and C's, then you've commited youself once again. This is no different to employment law in any other industry. It has been known to get massively complex, and ENOURMOUS law suits have emerged.

Certainly given the choice of being bonded, or having to pay for the TR (and possibly parts of line/base training), I know which I would opt for!

[winkle]

very interesting. one of the dodgy areas is the fact that if you continue to turn up to work after any changes are made you are in fact accepting these changes and would possibly have no recourse.
balpa has a very interesting article on bonding but of course its not definative but it gives ideas of what the outcomes can be.
employment law is a minefield and the only way at the moment is for individuals to sort out their own personal bonding issues with their present and future employer.
its an interesting point as to what the best way forward is either self funded TR or bonding, and i fully understand anyone who has already shelled out a huge amount of dosh trying to avoid borrowing more. i certainly would not be flying now if i had to self fund a TR.
what about the situation where an individual is let off the hook by his employer does this set a precident for others.