Bonds

[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.

[palebird]

Don't sign. If the company wants you bad enough they will drop the requirement. If you already work for them and they insist you sign a bond to stay employed make sure you have a witness. And take them to court when they try to collect. You will probably win.
Air Canada, Canadian North, Cargo Jet, Transat, to name a few don't use bonds. I know Porter requires a bond. Not sure about the rest.

[Cleared4TheOption]

Air Canada, Canadian North, Cargo Jet, Transat, to name a few don't use bonds.

I know for a fact at least one of those companies has quite a hefty 1 year bond. And given the pay and upgrade opportunities you almost have to be stupid to refuse to sign it.

[V3-HGX]

Transat had a 3-year, $30000 bond as of a few months ago.

[Grey_Wolf]

Don't sign. If the company wants you bad enough they will drop the requirement. If you already work for them and they insist you sign a bond to stay employed make sure you have a witness. And take them to court when they try to collect. You will probably win.
Air Canada, Canadian North, Cargo Jet, Transat, to name a few don't use bonds. I know Porter requires a bond. Not sure about the rest.

Porter has a bond? How much?

[HiFlyChick]

...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....

This

...And take them to court when they try to collect. You will probably win.

I'd love to hear someone comment who has actually sued another entity. I'm sure the airlines have lawyers on staff, but small companies and individuals have to pay the hourly rate, which gets real big real quick.

A few times over the years I've had to pay a lawyer to vet a document (not create the document, but just look it over), and the bill made me choke - and this after they kept missing corrections that I requested, and misspelling my name when they insisted it be inserted in a certain part of the document. I had a friend of a friend who had prolonged divorce proceedings that ended up being in the 6-figure range.

Even assuming that courts award payment of legal fees if you win, there's no guarantee you will actually win, and you may have exceedingly compounded your loss by adding in tens of thousand of dollars in legal fees.