Funding

How to save more than 200.000 euros on flight training?

To save more than what you would actually spend at a regular flight training in the Netherlands? Is that possible?? Yes it is! Continue reading.

The past

Before the liberalization of the air transport sector and the banking system, there were two airlines and two flying schools in the Netherlands: the KLM Aviation School (KLS) and the Dutch Flight Academy (NLS) which was owned by the state. If you were to get through the tough KLM selection, you would receive an expensive and serious training and real job security and ABN AMRO would have been prepared to fund your education. At NLS the government contributed its bit towards the education. Not really the most healthy situation… After the liberalization lots of new flying schools arose in the Netherlands, driven by the very large and globally unique funding opportunities at ABN-AMRO. These flying schools’ price policy used the KLS price -15% rather than calculating a normal margin on costs. Many schools actually operate as commercial establishments “dumping” their students in nice weather / low-cost / low-quality training locations such as the US, Spain, Portugal, South Africa so that margins on costs from 50% -100% could arise. We all know where the lack of regulation and the availability of extremely large funding opportunities have led to: a massive inflation in the stock market, the property market and of course the market for flight training. Hence there is an extremely high rate of unemployed pilots in our little country who only have had a mediocre training course at its best and who eventually have to pay 250,000 – 300,000 – euros over the 20 year term of their loan on a principal amount of 120 000 -150 000 euros and this due to the interest-on-interest effect! This high interest burden is caused by the fact that the loan and interest were immediately activated for the full 100% by ABN AMRO whereas this amount should only become entirely interest-bearing after two years of study!! Their interest burden alone amounts to 1000, – p / m. After the ABN AMRO was no longer solvent and was torn to pieces the state became shareholder after a nationalization. The consequences are obvious, funding was discontinued, other money sources were almost shut down and there are many lawsuits over the scandalous indebtedness and misleading practices towards young people whose dream has been taken away.

Borrowing a lot of money is one thing. But paying everything back after obtaining your pilot’s license is a whole other story! Moreover, what many flying schools’ students don’t realize is that there are a lot more expenses in a regular trajectory. Think about the cost for a type rating, visa procedure, loss of license insurance, guarantee fund and travel and accommodation abroad.

Type rating

Unfortunately, most airlines have stopped reimbursing the type rating for e.g. the Boeing 737 and the Airbus A320. And some airlines such as Ryanair even ask you to pay for your online training and assessment. The cost for a type rating is between 20.000, – and 40.000, – euros.

Travel and living expenses during your flight training

After all, for the duration of your pilot training abroad you’ll have to live, travel and eat.

Not being able to work / study in addition to your flight training abroad

Although one can still become a working student or do a second study in the Netherlands, these options have ran out abroad.

Interest

The interest on a loan for a pilot training of roughly 150,000 euros at a 6% interest rate amounts to no less than 9.000, – euros per year. This is similar to a mortgage for a house that has caused your total outstanding debt to increase rapidly during your studies already.

Hours of experience

Don’t think that having finished your studies at a flight academy and having gained 200 flight hours is going to get you hired at an airline just like that. In most cases you’ll need to gain experience, for example as a flight instructor. It may also be necessary for you to temporarily take another bridging job. So these early years are no repayment years. You’re probably starting to understand where this is all going. It is important to minimize your student loan.

Insurance

Think of so-called “loss of license” insurances when you unexpectedly lose your pilot’s license or cannot obtain one (not succeeding the course, medical reasons), a life insurance (should you decease, the bank would still really want to see her pennies back) and a health insurance. Also the bank wants you to put payments into a policy to build up capital for the debtor’s risk to be lower. All together these costs can add up up to 12,000 euros during your studies.

Landing fees

These are very high in the Netherlands when compared to other countries . 10-60, – euros per landing. You land 300+ times during an ATPL trajectory. These costs are often excluded from tenders.

The present

Because of the foregoing it has become normal in the Netherlands to ask extremely high fees for flight training compared to our neighbouring countries . One is simply still living in the past, a little bit like a house owner who thinks he can still sell his house for its price in 2007.

The future

The introduction of the Euro and the pan-European EASA regulation allows us now to compare international competition. Through turning off the cash flow at ABN AMRO for flight training by the government prices are falling sharply in the Netherlands and many flying schools went bankrupt. So pay close attention as to where to put your money!

What does this all mean for you, the student?

Below we compare the total outstanding debt of a regular flight school with that of the Executive Flight Academy program. And… the results are spectacular!

Your net savings at Executive Flight Academy

In case of an ATPL study at the Executive Flight Academy your instant savings amount to the substantial amount of 60 000, – euros! (Average 120,000 – at a regular school minus 60,000 – with us.)

Your gross savings at Executive Flight Academy

Subsequent to compound interest charges and principal payments, insurances, etc. for 8 years after finishing your studies your gross savings are almost 100,000 euros !! (See tables below.)

However, after 8 years the loan is far from repaid and lasts 20 years. So the differences are ultimately twice as large after 20 years!

Remaining debt prognosis regular flight school student

Assumptions: To repay 500, – p / m immediately after the study. 400, – p / m for a room rent abroad. 600, – p / m additional costs of living abroad. 12,000 euros cost of insurance for loan / study at bank. Income after study 1500 p / m.

Remaining debt prognosis Executive Flight Academy student

Assumptions: To repay 500, – p / m immediately after the study. No room rent abroad. No additional costs of living abroad. No insurance costs. Income after study 1500 p / m.

School approvals: NL-DTO-014 / BE-ATO-005 / HU-ATO-0029 SINCE 2001

Hyper Flexible

High training standard

The lowest prices