Bonds

[Daigo]

Nobody gripes about having to get their own CPL or IR to start a job.

I can't believe I'm going to get into this, lord have mercy...

A CPL and IFR are basic requirements universal to all 703/4/5 jobs. It's like requiring a degree in programing to work at Microsoft. It's expected. A type rating is company specific in that you could only benefit if the company is using that type. Sure, everyone and their dog has a king air 200, but it's not universal.

It is a company's responsibility to ensure their employees are properly trained, and that goes for any job in the world. The cost of training in aviation happens to be extremely expensive, but it is part of the cost of doing business. Every year a PPC has to be done, and the initial type rating is just a more expensive version that only has to be done once.

Having a pilot pay for their own type rating is basically like loaning a company money. And while it removes "guilt" of leaving an employer early, it doesn't guaranty you will ever get that money back. Just because one company says they will reimburse you over time, doesn't mean the other company you move to will pay you anymore than any other new pilots, or pay you anything up front. So now you've taken on a debt to "buy" your way into a job because you payed the company's cost of doing business.

What's next? Should you not only get a type rating but also buy a King Air too? They can lease it from you and over time you might make more money... Heck you can pay the fuel costs too. Whats wrong with being 2 million in debt to get a job that will make up for it and make you filthy rich in 15 years? The rich get richer, because we all know how easy it is to get a 2mill loan. Obviously I'm exaggerating, but where do you draw the line if you start down the road of financing your employer?

Bonds on the other hand are an incentive (or discouragement) to ensure a company is getting a return on their investment in you, and in no way put you financially at risk. I'm actually about to sign a bond and while I don't like it, I do understand it. And if I want to go elsewhere and not feel "guilty", I can pay what remains (or hopefully have my new employer pay it).

What happens if you buy a type rating and your employer has an accident and goes bankrupt and can't repay you? And no one is looking for a 200 driver, but you can get a job on a dash? Boy was that a great investment. And what if the type rating is for a plane almost no one uses?

What I am trying to say is it's not right have to take on debt in the place of a company for something that is not universally required for your career. If a type rating only cost $500 and you really want a job flying that type? OK sure you're not going to be in debt for that, but in reality it is too expensive to expect individuals to absorb the cost themselves.

Well said. I hope companies like these get put on blast and have little to no applicants. Just unacceptable

[lownslow]

Sure, everyone and their dog has a king air 200, but it's not universal.

What if it was? Would that change anything?

[seven-oh-nooo]

Do you know what percentage of pilots that owes you money tries to weasel out of it?

It probably feels like more than it really is, this year has actually been pretty good but a year or two ago it felt like everyone was doing it.

What are their favorite tactics? Simply "forgetting" to pay, or are there more convoluted schemes?

It's never as simple as just 'forgetting,' I make a point to remind them when they put in their resignation. Often there have been pilots who give lip service to me about paying if I bring it up but everyone can hear them mouthing off to their coworkers behind my back about how they're leaving without paying and @#$! me and so forth. Hangars aren't well insulted for sound, kids. We don't even have to sneak around to hear it, sound just carries really well in a big tin box. I also get folks who just call in sick for their last one to seven days on the job as if I'll somehow forget they ever existed. Sometimes I'll get a really late reference call for someone who pulls that and they end up being ejected from a half-finished groundschool, which is kind of funny. There was also one pilot who just played dumb when confronted about it. Like really, REALLY dumb. Didn't work. Just be a responsible non-asshole, is that too much to ask?

Maybe the worst are the ones who have lawyers in their families who then sue me over it. I won't get into too much detail because a couple have been absolutely vicious (they still lost, but vicious) and I don't want there to be some stretch that I'm defaming them on here and find myself in front of a judge again. Eff that.

Essentially the employer has put a monetary value upon your months or years of service...

That's half of it. It should say, "The employer has put a monetary value upon your months or years of service THAT YOU HAVE AGREED UPON BY SIGNING." That last part is important and is why you will lose in court.

Have enough self respect to take a good job in the first place and even if there is a bond, an awful lot of outstanding employees can have the balance forgiven when the finish line is in sight.

It's almost too obvious.

[digits_]

Interesting to hear the other side... If you don't mind my asking: why would they sue you over the bond? Shouldn't you be suing them to get your money back?

[ehv8oar]

I'm guessing because they believe the best form of defence is attack. They sue the employer in the hope that getting their side of the story into the courts first will mean they don't have to pay the bond.

[Cleared4TheOption]

Sure, everyone and their dog has a king air 200, but it's not universal.

What if it was? Would that change anything?

At that point you might be able to make an argument for it if the vast majority of companies preferred you to have said type rating before employment. But that would result in a much higher cost to begin a career as a pilot, which would reduce the number of new pilots. Most likely starting salaries would be higher to account for the fact that everyone has higher debt and fewer candidates.

I honestly don't remember what I spent to get my multi-ifr CPL, but it is probably not far off from what anyone getting a 3 year bachelor in whatever would accumulate in registration and book costs at a reasonable university. That's to say it's not totally out of reach, and you can work more while doing it. I don't know what a BA200 type rating costs, but I remember charting one being in the grand/hour or more range.

So maybe in an alternate universe it would be that way but as it is, making the pilot take on the company's debt is pretty scummy.

[photofly]

Having a pilot pay for their own type rating is basically like loaning a company money. And while it removes "guilt" of leaving an employer early, it doesn't guaranty you will ever get that money back.

It is like lending the company money ... which is exactly why ... it is "reimbursed back on a monthly basis (with interest) over the term of the employment contract". You lend them money, and they pay you back with interest. If you're concerned about getting the money back if you leave early, don't leave early. A fixed term contract is a contract, which is enforceable.

[ShawnR]

What are some typical bond rates? Say a PC-12? Does it vary dramatically operator to operator or is it more relative to how far they have to move you along ie..bringing C172 experience and transitioning to PC12? I fully appreciate that training costs a lot and some return on investment is due to the company. I am wondering what that number is, typically.....

Thanks
Shawn

[rookiepilot]

I sure wouldn't lend any company money. Not a chance. That's crazy.


What I don't get on these reading these forums, from a business chair, is when an operator blows up and goes BK, can't pay their people, they are the worst sort of scum, but leaving on a bond is totally OK. Dude, they're BK.....

Guess written contracts only apply one way. Totally support the guy here going after pilots legally for running out.

Edit ------------

I have no doubt as well there are scummy operators out there. (In anything) Pays to do due diligence before accepting a job with a bond IMO.

[digits_]

Having a pilot pay for their own type rating is basically like loaning a company money. And while it removes "guilt" of leaving an employer early, it doesn't guaranty you will ever get that money back.

It is like lending the company money ... which is exactly why ... it is "reimbursed back on a monthly basis (with interest) over the term of the employment contract". You lend them money, and they pay you back with interest. If you're concerned about getting the money back if you leave early, don't leave early. A fixed term contract is a contract, which is enforceable.

You assume the company will still exist in 2 years. For companies using such tactics, that could be a stretch. What if they lose their AOC or have to lay you off because they lost a contract? The risk is just too big in my opinion.

[ehv8oar]

How about if the Pilot is having to work in conditions they feel are unsafe or is just genuinely been treated poorly by a company and they leave because of that, should they still have to pay the bond?

I understand the reasoning behind companies bonding but it can put the employee in a difficult position.

[Cleared4TheOption]

...You lend them money, and they pay you back with interest. If you're concerned about getting the money back if you leave early, don't leave early. A fixed term contract is a contract, which is enforceable.

You don't get any of that interest, the bank gets the interest. If you have to take a $10,000 or $20,000 loan you aren't going to get that for free. When you get repaid "with interest", that is all going to pay off the loan. And it's not only a concern about leaving early and not getting the money, it's the risk of the company going bankrupt. I bet you'd be thrilled to have paid your own dash 8 type rating if you started working for Regional 1 just 6 months ago. I would never, ever put myself into debt lending money to any business that wasn't my own.

If THE COMPANY'S CONCERN is you leaving early and them loosing out on their investment, then they can use bonds. If pilots don't pay their bonds then take them to court. A company that deals in millions of dollars a year is not going to suffer from one pilot that doesn't pay a bond. An individual will certainly suffer from being 10 grand in the hole (on top of student loans and CPL costs) and out of a job.

Even if you think it's ok for a company to demand you pay your own type rating, would you think it reasonable to pay for your PPC every year? No? Well then why wouldn't they pay the equivalent cost of a PPC towards your initial type rating? It's a recurring annual cost whether you have 500 hours or 10,000 hours.

[Cleared4TheOption]

How about if the Pilot is having to work in conditions they feel are unsafe or is just genuinely been treated poorly by a company and they leave because of that, should they still have to pay the bond?

I understand the reasoning behind companies bonding but it can put the employee in a difficult position.

If that were the case you may be able to argue that if they take you to court. But you'd have to have some kind of proof.

For instance, if they were forcing you to fly overloaded... refuse the flight. Make copies of the loading. If they fire you for it and you take that proof to court showing that they fired you for not breaking regulations, you'll win hands down.

[goingnowherefast]

I once interviewed at a company, they said the bond was up front and specified the interest rate. I went home and looked at my financial situation. I could not secure financing at the rate the company offered. Long story short, I was going to loose approximately $200 in interest over the course of the loan. I didn't take the job.

[Aviatard]

Loose vs. Lose
Lose is a verb that means “to fail to win, to misplace, or to free oneself from something or someone.”
Loose is an adjective that means “not tight.”
Only one O distinguishes loose from lose.

This has been a public service announcement. You can thank me later.

[photofly]

If THE COMPANY'S CONCERN is you leaving early and them loosing out on their investment, then they can use bonds. If pilots don't pay their bonds then take them to court.

There is no “if”.

It’s very expensive and time consuming for a small company to try to recover money. Legal costs would probably cost more than the debt, and even if you win in court the practical chance of getting a delinquent pilot to pay up what they owe is very small.

It’s much better for the company to make it very much the pilot’s problem if he or she reneges by getting the pilot to borrow directly from the bank. Banks have long reach, unlimited resources, and lifelong memories for money they’re owed. They will always get the money back, unless want to declare yourself bankrupt.

I once interviewed at a company, they said the bond was up front and specified the interest rate. I went home and looked at my financial situation. I could not secure financing at the rate the company offered. Long story short, I was going to loose approximately $200 in interest over the course of the loan. I didn't take the job.

And that is an indicator that the system is working properly. A pilot was offered terms he didn’t like, and declined the job. That encourages the company to offer something more attractive the next time.

Even if you think it's ok for a company to demand you pay your own type rating, would you think it reasonable to pay for your PPC every year? No? Well then why wouldn't they pay the equivalent cost of a PPC towards your initial type rating? It's a recurring annual cost whether you have 500 hours or 10,000 hours.

I actually wouldn’t care. The more costs I bear, the higher salary I would expect.

[Cleared4TheOption]

I actually wouldn’t care. The more costs I bear, the higher salary I would expect.

Well sure, if it's being compensated for by a higher salary. But the reality is it probably wouldn't be.

[rookiepilot]

And that is an indicator that the system is working properly. A pilot was offered terms he didn’t like, and declined the job. That encourages the company to offer something more attractive the next time.

That should be the bottom line in every industry. It isn't ie. in the public sector, because unions insist on pushing compensation packages far beyond what any free market could bear, then are powerfully politically to make sure that can continue.

[FADEC]

Remember JetsGo?
Leblanc required Training Bonds; 30K, a lot of pilots were out of substantial amounts of money when the company failed.

[raccooncptn]

Sure would be nice if there were no bonds or training agreements.

Unfortunately aviation is full of pilots like the guy in the Arctic Sunwest case. Guys with zero shred of decency or honor. These are the guys that will forever ruin it for everyone and will ensure that bonds will not go away.