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http://www.ainonline.com/news/single-news-...ining-industry/

 

As the economy continues to founder, the financial ripples are reaching all aspects of the aviation industry, including flight schools. Helicopter flight schools, in particular, are beginning to feel the pinch as many have noted a drop in enrollment levels amid the double burden of a tight credit market combined with suspicion about students’ abilities to pay off loans in the wake of the Silver State Helicopters collapse.

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http://www.ainonline.com/news/single-news-...ining-industry/

 

As the economy continues to founder, the financial ripples are reaching all aspects of the aviation industry, including flight schools. Helicopter flight schools, in particular, are beginning to feel the pinch as many have noted a drop in enrollment levels amid the double burden of a tight credit market combined with suspicion about students’ abilities to pay off loans in the wake of the Silver State Helicopters collapse.

 

Our flight school has seen an increase in inquiries due to lay offs in other job markets. Quite a few people are losing their jobs and deciding its time to do something they've wanted to for a while. This is, of course, anecdotal and subjective (although, so is the article you quoted) but take it for what you will.

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Ditto... We have had an increase in inquiries, however most of them don't have the means to do it.

 

At least the current credit market has cut down on the number of, "but I have a 700 point credit score, they should loan me the money" comments from 22 year olds with no co-signers...

 

*shrug*

 

At the end of the day, the lack of new domestic student signups will cause a gap in 1,000 hour pilots 2 to 3 years from now that the GOM and tour companies will feel, it will be interesting to see how that plays out.

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Ditto... We have had an increase in inquiries, however most of them don't have the means to do it.

 

At the end of the day, the lack of new domestic student signups will cause a gap in 1,000 hour pilots 2 to 3 years from now that the GOM and tour companies will feel, it will be interesting to see how that plays out.

 

Very good point, and at the same time, the older pilots will be retiring (estimated to be around 25%).. and to top it off, if something isn't done within the next few months many of the schools will not be able to hold on, exacerbating the situation exponentially.

 

dp

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jras312,

 

 

i personally know a gent that started at Rotors about two years ago, he paid $53,000 for his training, TOTAL, all the way thru CFII. he flew as much as he could, did all the studying himself and busted his ass.

 

after around 900 hours of instructing he got a job flying for a great company, he does long-line and power line inspections in a nice 206. he's making around $70k a year working two weeks out of the month. NOW THIS IS CERTAINLY NOT THE NORM, this guy was a great stick from the beginning, but, it can be done. (he had some of the money and borrowed the rest..)

 

i am just saying that it can be done for less money if you do it right.

 

you just have to want it bad enough.

 

i also know a guy that has a mowing company, my dad does his taxes, he makes around $100k a year, but it took him 20 years to get there.

 

if it were me, i'd rather sweat my butt off flying over the Grand Canyon with some pretty girls in the back of a 130 than in someone's back yard, no matter WHAT THE PAY WAS!! :D

 

good luck, don't give up and keep doing research. this site is a great place to start so you are already on the right track.

 

aloha,

 

dp

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Most of the EC-130s do have AC... :)

 

As has been said, those who really want it badly enough, get it. Those who want it if it isn't too hard, don't.

 

But that is true with most things worth having in life...

 

Fly Safe!

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My thoughts exactly... the EC130 does have A/C though, right? :P

 

 

yeah, they do, but, in the sun... well, you get the picture. like most ac's, they work for a while and then they don't.. as soon as it gets really hot they seem to not be working. one solution i have learned... altitude! that's one time it's ok to act like a fixed wing. :-)

 

dp

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From an article on the newly proposed federal budget:

 

[The budget] proposes large increases in education funding, including indexing Pell Grants for higher education to inflation and converting the popular scholarship to an automatic "entitlement" program.

 

Anyone who is in, or just out of, high school and who doesn't go to college is nuts. The federal government is saying it is going to pay for it. A non-college graduate is going to be at a severe competitive disadvantage in a future where there are going to be so many more job seekers that do have a degree.

 

The world has changed...don't get caught applying old solutions to new challenges.

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From an article on the newly proposed federal budget:

 

[The budget] proposes large increases in education funding, including indexing Pell Grants for higher education to inflation and converting the popular scholarship to an automatic "entitlement" program.

 

Anyone who is in, or just out of, high school and who doesn't go to college is nuts. The federal government is saying it is going to pay for it. A non-college graduate is going to be at a severe competitive disadvantage in a future where there are going to be so many more job seekers that do have a degree.

 

The world has changed...don't get caught applying old solutions to new challenges.

 

Yep, but the people that are paying for the "spending bill" are the same people that would need to hire those college degree holders. So if they don't have any money to hire anyone to begin with, a degree won't make much difference, might as well do something you enjoy even if it costs some money for training and wont make you rich and famous...

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...l do something you enjoy even if it costs some money for training and wont make you rich and famous...

 

Flying won't make me rich and famous?? What the?? I need a refund! :D

 

Joking aside, I agree. There are lots of degrees out there that will "qualify" you for jobs that are just as competitive as aviation, pay the same as (or sometimes much less than) aviation, and yet the degree costs just as much as (or sometimes more than) flight training. Plus, I don't won't a desk job! Not unless that desk has rotors and a turbine...

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Looks like the new Obama budget guts private loans. Looks like Sallie Mae will be out of business...

 

http://blogs.wsj.com/economics/2009/02/27/...loans/#comments

 

"There could be one less candidate for the Federal Reserve’s program to jump start the asset-backed securities market.

 

With the administration of President Barack Obama planning on taking over most student lending, there could be few, if any, private lender loans to securitize....

 

The student loan asset-backed securities market has been dominated entirely by government-backed FFELP, or Federal Family Education Loan Progam, loans. These were packaged into bonds by private companies like SLM Corp. , more commonly known as Sallie Mae. This is the sector that may soon cease to exist....

 

Private student lenders like Sallie Mae, Nelnet Inc., Student Loan Corp. and others will only have “some legacy loans or private loan originations but that’s probably about all,” Astorina said.

Edited by klas
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Looks like the new Obama budget guts private loans. Looks like Sallie Mae will be out of business...

 

http://blogs.wsj.com/economics/2009/02/27/...loans/#comments

 

Actually, the feds just intend to take over student lending directly...without the involvement of private sector lenders. The feds were bribing the lenders to make those guaranteed student loans anyway because without the federal subsidy the lenders would not loan to students...the default rate on loans to students is too high to be recouped by the rates they can charge. With the feds doing the lending there will be lots of money available for "education"...as long as that education meets their standards.

 

Sallie Mae very well could be hurt...the stock tanked so the market seems to think so. All they will have left is private loans and with the feds giving away money students may not need those.

 

I would guess though that if a flight school wants to stay in business they had better be a 141 operation in order to qualify for the coming federal gravy train. Anything less and the school won't get any federally subsidized students and there will be darn few private loan students.

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So Fry, how does being a 141 school qualify me for the "coming federal gravy train"?

 

*rolls eyes*

 

Unless you're Title IV, the federal money is meaningless.

 

The real problem is that lending period has seized up, getting any kind of loans, from car loans to credit cards has become very hard. If this doesn't get resolved pretty quickly, the United States is going to have a repeat of the 1930s.

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So Fry, how does being a 141 school qualify me for the "coming federal gravy train"?

 

*rolls eyes*

 

Unless you're Title IV, the federal money is meaningless.

 

The real problem is that lending period has seized up, getting any kind of loans, from car loans to credit cards has become very hard. If this doesn't get resolved pretty quickly, the United States is going to have a repeat of the 1930s.

 

You're looking at past conditions and applying them to the future. We're at the beginning of a paradigm shift from what has taken place since the late 70s. The federal government is embarking on the most sweeping expansion of government spending since WWII. What is coming...in education spending...will be more akin to the GI Bill after the war than to anything we have seen in the past nearly four decades.

 

The government assistance for education that I remember from the 70s was very generous. But there were hoops that had to be jumped through to get the money. The feds showered money on only certain types of schools and certain types of programs...although the number of programs that qualified was large. I'm of the opinion that we will be returning to those generous times of government funding for education. And it is possible that flight schools will be included...maybe a 50/50 chance given the limited size of the occupational field. But, if flight schools are allowed federal money, it is reasonable to assume that the feds are going to require some ability to exercise oversight of those schools whose programs it will fund. Part 141 allows that federal oversight of flight schools.

 

On the other hand, private loans for flight training are going to become even more difficult to get. Sallie Mae and other private student loan programs are probably on the ropes. With the government making direct student loans that will only leave lenders like SLM with the private loans market. The default rate on those loans is so high that without a government subsidy or an easy money environment the private loan lenders have to charge such a high interest rate that there will be few qualifiers for the loans. SLM is probably toast...and probably so are most small flight schools.

 

Uh oh, that's gonna set off a storm. So here's my reasoning.

 

Small flight schools draw from their immediate geographical area and that limits the potential market. Subtract from that market the number of potential students who cannot qualify for financing and that leaves a market too small to support a flight schools costs. How many rotary flight schools were there before the easy money days of the Greenspan Fed (i.e., the early 80s)?

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You're looking at past conditions and applying them to the future. We're at the beginning of a paradigm shift from what has taken place since the late 70s. The federal government is embarking on the most sweeping expansion of government spending since WWII. What is coming...in education spending...will be more akin to the GI Bill after the war than to anything we have seen in the past nearly four decades.

 

The federal government is not the economy, they cannot prop it up, because at the end of the day, the government does not produce goods and services that add real value to a capitalist economy.

 

What we are doing is setting ourselves up for inflation in the coming years as we start printing money instead of borrowing it (as the world runs out of money to lend us, or the desire to do so).

 

What I do know for sure is that nothing is moving in the banking industry, bond markets, or commercial paper markets. This is why GM is in so much trouble, not that they don't have buyers, they don't have buyers who can get financed.

 

Rick Wagner is an idiot, if he was smart he would forget GMAC and just have GM directly underwrite the loans to customers. Their cars and trucks are just sitting due to a lack of financing, might as well let people take them home and take payments on them. But of course he keeps thinking the government has to bail him out, which is foolish because of the conditions that come attached to that money.

 

Also, keep in mind the G.I. Bill doesn't pay for enough flight training to matter without private loans picking up the difference. While it is true that it is easier to borrow $35K than $70K, these days even that is hard.

 

If they picked up 80% of the entire tab, then they would be offering a "gravy train" and we'd probably be overrun by students.

 

And it is possible that flight schools will be included...maybe a 50/50 chance given the limited size of the occupational field. But, if flight schools are allowed federal money, it is reasonable to assume that the feds are going to require some ability to exercise oversight of those schools whose programs it will fund. Part 141 allows that federal oversight of flight schools.

 

Keep in mind that Part 141 flight schools are not currently eligible for Federal Student Loans, that is what the Title IV is for. I can tell you from experience that becoming Title IV is quite hard, expensive, and not an option for most schools.

 

Now if we could get Federal Student Loans by just being Part 141, that would solve everything. It also would create a glut of helicopter pilots pretty quickly.

 

On the other hand, private loans for flight training are going to become even more difficult to get.

 

We agree on this one.

 

SLM is probably toast...and probably so are most small flight schools.

 

We agree on this one as well. SLM now requires a 750 credit score to qualify. That more or less makes them useless right now. The reason for it is they cannot borrow money on the open market, the bond markets are closed to them. So they are only lending the cash they actually have right now.

 

This is why I said that unless the credit markets (and bond markets) get unfrozen pretty soon, it won't matter because we'll be in a depression for awhile.

 

Uh oh, that's gonna set off a storm. So here's my reasoning.

 

Why would that set off a storm? I think it is very true. If a flight school is not Part 141 and going after GI Bill and Foreign Students, or they do not have additional business lines to support the company, they won't last long.

 

The idea of Pay-As-You-Go sounds nice, however few people can really do that. I could not keep the doors open with just those customers, there are not enough of them. This is why we are Part 141, we need the GI Bill and Foreign students to make the business work now that Sallie Mae isn't really an option anymore.

 

Small flight schools draw from their immediate geographical area and that limits the potential market. Subtract from that market the number of potential students who cannot qualify for financing and that leaves a market too small to support a flight schools costs. How many rotary flight schools were there before the easy money days of the Greenspan Fed (i.e., the early 80s)?

 

In the early 80's, there were few helicopter flight schools because there were plenty of Vietnam helicopter pilots and the pay in the industry was terrible.

 

In fact, it wasn't until the past 10 years that helicopter schools really took off. Even in the late 90s it wasn't what it is today.

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