It’s been known for at least a week but only been confirmed officially today.
From their FB page:
Flying Time Limited is not in a position to make any immediate refunds.
Not a lot changes in this business:
Interesting to see the August ‘21 accounts have been restated recently and another £3m of liabilities now on the balance sheet. Previously they had net assets of £1.2m and restated shows net liabilities of £2m. How could this have been missed? 95% of our son’s fees now paid with 100 hours of flying still to do! Lots of students and their sponsors out of pocket too! Still no communication to us as sponsors, only to the students!
I hope it doesn’t affect the airport, but prob99 FTA have not paid the airport for many months so it won’t affect the airport’s cash position.
Apollo Maintenance, wholly owned by FTA for some years, has also gone bust as a result. Somebody might buy them; they have a load of CAA approvals including an extremely rare ability to issue a Form 1 on used parts.
That isn’t great news especially given the ongoing shortage of pilots. These mom and pop operations do seem to operate by a pre selling with a deferred revenue model, which, if they are not fundamentally profitable, will catch up with them.
It is not out of the question that the big national carriers may return to running their own schools.
That’s very sad. I feel for the students many of whom will now be vastly out of pocket. Not a nice start to their life in aviation.
If the planes are not financed up to the eyeballs and I was the airport I would be out with a wheel clamp!
Email sent to clients
Restatement ? Understatement of the year.
I periodically have a customer fail, leaving unpaid invoices. An administrator or receiver is appointed to liquidate the assets, and their final report always looks something like this:
The costs of administration always seem to match the realisable capital It’s sad because the company usually turns out to have been solvent, just with a cashflow hole or very high salaries/employment costs. I’m a fan of the US chapter 11, which temporarily freezes debts and allows companies the option to trade their way out.
WOW you got £1? You could have a party! I’ve never, ever, since I started in 1978, got even £1
The UK does have options – example – but the company needs to be at least technically solvent and in practice needs to be have cash arriving at some point which is enough to pay people off. I saw that once, early 1980s. Got paid after a year or so. That company was in advertising (in London) and had “big pharma” clients who paid 6 months after they felt like it…
The problem with FTOs is that they use student deposits for cash flow. It isn’t held in escrow – obviously otherwise it would be worthless to the business. In return, the FTO offers a discount; they have to otherwise nobody would pay up front.
In B2B there are fairly easy rules for bad debt avoidance but in this case the risk is there and cannot be avoided if you want the discount.
Various people have set up FB groups for the customers who are owed money. Various desperate measures are being proposed, like complaining to one’s MP. These groups then fill up with other FTOs touting for business, some offering discounted classroom time, but obviously none offering discounted flight training.
I guess classroom time is the most lucrative part of it, given that you can do a CPL/IR for about 35k… OTOH I am told you will never get a job with Easyjet if you go that route.
Is there a .ppt out there in the inter web where the FTO was touting for a capital injection? It might be useful to understand what rationale is used to attract investment capital.
Some schools have ridden a wave and then were sold to larger organisations at a substantial profit, but this happens rarely.