Banks, schools & the training scam
With the MSM (mainstream media) catching up to industry fact that the pilot-shortage narrative might not be that simple after all, this July 21th both CNN and CNBS (in a lesser extent - UAE media totally disqualify) ended up suggesting "finding a first job can be tough".
Today we will cover the bank "angle" (pun intended) and prove flight schools contractually oblige newly trained pilots to engage in p2f to fake employment-record-improvements to secure more loans for more students for more profit.
ABN AMRO - weak safeguards amidst "confusion"
Being "the only Dutch bank to offer loans to trainee pilots" in an economy where "pilots [...] have been unable to earn enough to pay back the debts because of the economic downturn and the arrival of budget airlines [...] which pay far less than flag carriers", it was only a matter of time before issues arise.
Sure enough since August 2011, a group of 40 pilots triggered court cases (still ongoing) for failure in the bank's duty to oversee and implement adequate loan provisions (after having sought fair settlement on debt restructuring). ABN AMRO reportedly assumed:
"the market is improving and a shortage of pilots is on the cards"_DutchNews.nl
...soundbite that doesn't add up with Mr F.C. Schoenmakers' confidential letter to numerous Dutch flight schools (Stella, CAE and EPST) :
"[...] we shall further tighten the criteria [...] to the granting of credit for students of the training institutes. The reason for this is the rising number of unemployed prospective commercial pilots".
A few months later in December 2013, Mr Schoenmakers became "immediately available" on the job market...
CAE OAA & EPST - in for a penny, in for a pound
The only Dutch loan provider tightening loan criteria with the addition of new measures (as of January 1st 2013) among which:
"As soon as the number of students on the waiting list of your training institute is higher than 10 [...] A new student will only be eligible for a loan when two students have been placed".
it became paramount for flight schools to "place" their pilots so as to not diminish their cash flow student number. Where? CAE OAA (CAE Oxford Aviation Academy), sister company of CAE --already involved in p2f with Ryanair-- and EPST (European Pilot Selection and Training) have one clear solution:
... the kind of "job offer" where:
- a fee of £100 is chargeable for Stage 2 of the assessment process (non-refundable).
- A fee of £150 is chargeable for Stage 3 (also non-refundable).
- The pilot must self-fund Type, Base and Line Training including VAT at a cost of £38,400.
- Living expenses during this time will meet neither salary nor compensation.
- The pilot must set his own limited company and get hired through the intermediary agency CAE Parc Aviation (another CAE sister company), because let's face it, you didn't think the airline would later hire you directly, did you?
No, not Ryanair, just EasyJet's take on modern day slavery "pay-to-fly" of course, and to top it all, you can't escape the rape program since according to the foreword translation*:
"You are contractually obliged to participate in placement"
Our readers can now simultaneously guess how those EPST students were "placed" and what that ABN AMRO's "improving market" and "shortage of victims pilots" really is.
Verdict - banks raise, schools bluff, pilots fold
Conveniently dropping the excuse that Type Rating and Line Training are just training (what we have been saying for years) to count those "opportunities" as "placement", flight schools found the perfect mean to defraud banks and bypass any of their criteria based on job finding. Banks unable (unwilling?) to tell the difference become (willful?) accomplice by perpetuating schools' scam, loading pilots with more debt for short term profit, with no incentive to dig deeper since real safeguards would impede their conducting business too.
In this poker game of lies and deception, pilots have the worst possible hand: they no longer decide to pay-to-work or not, they are now forced to, by contract.
*All Dutch translations from a sworn certified translator for the English and Dutch language at the district court of Amsterdam.