What's the problem?
Approved Training Organisations (ATOs) are businesses, and all businesses need revenue to generate profit. Revenue can be generated in many ways; you may purchase a chart from an aviation retailer, pay for a landing fee at an aerodrome etc. Here, you are receiving the goods or services straightaway or pay for goods or services you have already acquired. But what if you are paying for goods or services that are to be delivered in the future, such as a licence or rating training course? This is 'Deferred Revenue (or income)', and is where the problem begins.
Deferred Revenue is not in itself dangerous, so long as the ATO remains in a position to deliver the training. But when outgoings and operating costs increase to the point in which the ATO requires use of student course finance to pay their debts, it can lead to disaster.
This hole in course finance eventually needs plugging when it's time to provide the training. One way may be to 'borrow' finance from another student's course payment. Without investment or other streams of revenue, this repeating system can quickly spiral into increasing debt, inability to maintain aircraft and eventually training.
Where Deferred Revenue is in use at an ATO and leads to business insolvency, the creditors (the student pilots and their financers) risk losing significant sums of money for flights or ground training not delivered.
The recent collapse of several ATOs in the UK has lead to the loss of almost £4 million of student finance, with many students individually owed up to £80,000.
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Deferred Revenue is still common practice at many ATOs.
Our Campaign
Becoming a pilot is not just a career choice; it's a lifelong dream for many aspiring aviators. However, dangerous business financial planning and lack of oversight is putting at risk those talented individuals who wish to pursue this path.
We believe that given the collapse of several large ATOs in the last year, change is needed by the UK regulator; the Civil Aviation Authority, to audit and ultimately prevent the loss of significant finance under 'deferred income' systems.
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To achieve our aim, we have established 4 primary goals.
#ProtectStudentPilots
1
Standardisation
We are not the only organisation seeking change, but we are the only one seeking a standardised approach to regulatory oversight. Our standardised proposal will be directed at the Department for Transport for regulatory change, to be enforced by the Civil Aviation Authority.
2
The Professional Voice
By gaining the support of industry affiliations, professionals, organisations, representatives and unions, we believe we can unite a single 'professional' voice of experts directly to the policy makers.
3
The People's Voice
A campaign means little without the support of the people we are trying to protect; the students, pilots, creditors and family members. By gaining the support of those affected by poor business practice, our campaign is enhanced by the strength of the 'People's Voice'.
4
Publicity
Using the combined influence of the Professional and People's Voices, we will be seeking wider public attention of the campaign against media appearances and publications.
How Can You Protect Yourself?
1
Research
Before making a prepayment or entering into a deferred revenue arrangement, thoroughly research the ATO. Look for reviews, talk to current or former students, and gather as much information as possible about their reputation, financial stability, and track record.
2
Read the Small Print
Review the terms and conditions of the deferred revenue agreement carefully. Ensure that the contract includes provisions for refunds, contingencies for unforeseen circumstances, and clear communication channels if issues arise.
3
Consider Alternatives
Explore payment options that provide more flexibility and minimize your exposure to financial risks. For example, consider paying in installments or upon completion of each training milestone, rather than making a lump-sum prepayment.
We Need Your Support
The awareness of our campaign is vital to support our petitions and political lobbying. Please like, follow and share our social content where you can.