How do bonds work

[wan2fly99]

Newbie question:

If a company asks for a bond and states you must go to bank and take out a bond for $$$.

It is a 2 year commitment for a company.

The company states that they will pay the bond as long as you are employed with them.

What happens for some reason the company cannot continue and closes

What happens to that bond and who is liable now to finish paying it?

I would assume it would be the person taking the bond out?

Thanks for any info

[ant_321]

In the case of a company closing with that type of Bond you are basically screwed. It's yours to pay. Other companys will cover the cost themselves. If you break a bond with them you owe the company money, not the bank.

[wan2fly99]

Thanks for the info

I was assuming that. So better get a financial statement to see how the company is doing before you invest all that money in a bond

[X-Savior]

most reputable companies will not ask you to go to the bank and get the bond yourself. In my experience only shady or unreliable companies do this. All of the up-standing companies will do the bond for you. Then if there is a problem they are responsible or in some cases if they are over staffed and you get laid off for any reason the company will free you of your bond because it was not your fault you are getting laid off.

Any company requiring anything more then a 1 year bond is already taking advantage of you.

I had one company try putting me on the hook for a 30 Month 36K Bond that I go and get myself from the bank but they were pushing me hard just to "come up with the cash and pay it myself" for the training. Needless to say I walked away from that job offer in a hurry.

[wan2fly99]

Ok thanks for all the info. I can see where yu can loose.


Thank you all again

[ScudRunner]

Don't confuse bonds , promissory notes/training contracts as the same.

JetsGo is the best example of a bond and what can happen, Pilots were required to sign a loan from a bank for their type rating/training and the company made the payments over two years. So if you left JetsGo you had to make the payments to the bank, and of course we all know what happened and these pilots got stuck with a big loan when JetsGo went tits up.

http://www.theglobeandmail.com/news/nat ... cle977060/

Training contracts or Promissory notes are simple, You agree to stick around and fly for a company over a term usually one or two years. The company sends you for training and picks up the bill, your balance owing amortizes to zero over the term. So if you where to leave 6 months into a 12 month contract for $12,000 you owe the company $6,000.

Some will tell you that you can skip out on these contracts and there is nothing a company can do to you. They are wrong I have read cases were pilots skipped out and were successfully sued by the company. That being said you skip out with a month remaining it will cost more to sue you than was left outstanding. However some don't care and will sue you on principle just to be consistent.

In one of the cases the company required a $30,000 training contract, when the smoke cleared the company was required to produce actual training cost figures and it was much lower and that was the amount owed.

Those costs included off the top of my head were, Plane tickets, Hotel, Ground School, Simulator, Ride (TC)

[trey kule]

The idea behind the bond is to keep pilots from taking all the company paid training, and then start putting out resumes for their next job the day after they get the rating..It has happened.

So,,, the company pays for your training, which is a legitamite cost to them. You agree to stick around..The company goes broke you are off the hook..there should actually be a clause in the agreement to that effect. Also there should be a clause that says if you get furloughed, you are not responsable. If you quit for medical license lost same thing. License violation and suspension ..you pay...Simple and clear.

Unfortuantely, there are some sleaze ball companies around that first of all are trying to offload their training costs completely by having someone get a bank loan..The company is out diddley in this case. Training is a legitamite part of their business and they should not be asking employees to upfront the costs..Even worse are the companies that want you just to pay for your training, and then promise to make the payments..The training division of an air carrier is not supposed to be a profit center.

My advice is free so take it for what its worth..If a company is asking you to take out a bank loan or pay for your initial training...dont take the job.. Dont bother discussing it..You know what type of people you are dealing with.. Better to stay away from them , then try and get away from them..No company should be asking for any form of money upfront..

I have also seen some bonds that overlap the PPC validity..that is the PPC is good for 12 months, but the bond is for 15..another bond for a year when the renewal PPC comes due..It goes on and on until you end up paying out the last few months.

I hate bonds with a passion, but there are so many sleaze bucket pilots out there who will literally get a PPC and give thier notice two days later that I understand the need for them..It is just to bad that there are also sleaze bucket companies out there who want to eliminate their training costs entirely, or, worse, make money on them.. Again..avoid these type of companies..If they think like that, it will also filter down into their total treatment of pilots.

There are lots of reputable companies that have bonds in place which are fair to both parties...A company that is fair to you when they hold the hammer of employment will most likely be fair to you as an employee.

[wan2fly99]

okay thanks for all the info. Didn't get the job anyways, but the bond requirement had me thinking.

We keep trying anyways thanks for all the info guys

[goleafsgo]

How does it work if someone goes to a company with experience on an aircraft from a previous company. ex: a captain on a metro at perimeter gets hired at bearskin. Will he still be bonded at bearskin?

[Jack In The Box]

How does it work if someone goes to a company with experience on an aircraft from a previous company. ex: a captain on a metro at perimeter gets hired at bearskin. Will he still be bonded at bearskin?

Depends on the company. I got a call from Carson who wanted me to fly the Metro for them for less then half the money I make now. They wanted the 10 K bond for 2 years, and I had the type rating already.



needless to say, they never heard back from me.

[Rudder Bug]

I had one company try putting me on the hook for a 30 Month 36K Bond that I go and get myself from the bank but they were pushing me hard just to "come up with the cash and pay it myself" for the training. Needless to say I walked away from that job offer in a hurry.

Jetsgo?

http://en.wikipedia.org/wiki/Jetsgo

[Lurch]

In one of the cases the company required a $30,000 training contract, when the smoke cleared the company was required to produce actual training cost figures and it was much lower and that was the amount owed.

Those costs included off the top of my head were, Plane tickets, Hotel, Ground School, Simulator, Ride (TC)

I was about to ask about this.

You leave half way through your contract, they say you owe 15K but their actual cost were 20K so do you owe 10K or the amount you signed for?

Lurch

[KK7]

In one of the cases the company required a $30,000 training contract, when the smoke cleared the company was required to produce actual training cost figures and it was much lower and that was the amount owed.

Those costs included off the top of my head were, Plane tickets, Hotel, Ground School, Simulator, Ride (TC)

I was about to ask about this.

You leave half way through your contract, they say you owe 15K but their actual cost were 20K so do you owe 10K or the amount you signed for?

Lurch

You can research cases where pilots/employers have taken the others to court over the matter, and in cases where the training was less than what was in the contract, the judge used the actual training costs. So in Lurch's example above, they would have been on the hook for $10 000.