How Do I Pay for my Commercial Flight Training?
A look at how to finance your airline pilot training
How do I pay for my commercial flight training?
There are a number of ways to pay for your commercial flight training. To fund or finance your airline pilot training, you generally have the following options:
- Be accepted for a large bank loan, secured against a property to pay for your integrated flight training.
- Be accepted for an airline specific cadet program where the airline either sponsors your training or will act as a guarantor for a loan to fund the training.
- Complete flight training through the modular route to allow you to continue working and pay for your flight training as you go / can afford it.
- Save up for a number of years whilst in full time employment before self-funding an integrated flight training course.
- Become a pilot with the military who pay for your flight training, then convert your licences to a civil commercial licence when you’ve finished your minimum service requirements.
Unfortunately for a lot of people, financing the flight training is the biggest obstacle to becoming a commercial airline pilot. With the cost of integrated flight training for airline specific cadet programs now exceeding £120,000 / €140,000, securing the funds needed to finance the training can be both very challenging and daunting.
With integrated flight training programs starting at about £80,000, there are only a handful of realistic options you can use to fund the training and one of these is a bank loan. Due to the amount of money you will need to borrow, banks will require a ‘guarantor’. This means the loan is secured against an asset, and the asset is typically a property.
The majority of prospective commercial pilots want to start their flight training shortly after leaving school and clearly you are unlikely to own a property at his age. Therefore people are generally reliant on their parents or other family members (such as grandparents) securing the loan against their property for you or re-mortgaging the house.
Unfortunately this is not an option for everyone as not all families own their home or have paid off enough equity in the mortgage.
Some banks offer flight training specific loans which offer payment holidays until you’ve finished the training. Others, you need to start paying the loan back straight away but clearly you won’t be earning any money whilst you are completing a full time integrated commercial flight training course.
The Risk of a bank loan
This option does not come without risk. If you don’t end up getting a flying job as soon as you’ve completed your flight training, can the loan repayments still be made? Thousands of people have had their airlines cancel their provisional offer of a job half way through their training or have even been made redundant from their airline whilst still trying to pay off the loan. You need to think about what your contingency plans are if it worst happens to protect the property you may have secured the loan on.
Although you’d hope never to need it, this is where having some additional qualifications or previous work experience to fall back on can be a invaluable.
Cadet Programs / Sponsorship
Since the tragic events of 11th September 2001 in New York City, very few airlines around the world have continued to offer flight training sponsorship. Just prior to the Covid-19 pandemic there were signs this was starting to change. For example, in 2019 Aer Lingus opened their Future Pilot Program where the selected cadets were fully funded.
British Airways, Virgin Atlantic and easyJet were prepared to act as a guarantor for loans for cadets who were successfully accepted onto their pilot programs. Some airlines such as Emirates were prepared to pay for their cadets flight training in full although this was only applicable to UAE nationals.
Airlines have felt the full financial strain of the Covid-19 pandemic and it will likely take many years to recover and perhaps even longer to pay back the loans they needed and build up a healthy balance sheet. With many thousands of pilots currently unemployed, it would seem unlikely that any fully sponsored or loan guaranteed schemes are likely to return any time soon.
Complete Modular Flight Training
The beauty of modular flight training is that you can complete each bit of training as when you choose to. Basically you dictate the time table. It’s also a much cheaper way of getting your commercial pilots licence. Doing it this way allows you to keep working whilst completing your flight training on the side, for a cheaper price, and when you can afford it.
You can complete modular flight training for between £/€ 35,000 – £/€ 50,000. Whilst this might seem like a lot, it’s still significantly cheaper than integrated flight training and makes it more manageable. Clearly the timeline for how long it takes to complete the training will depend on how much you earn / can afford.
When completing modular flight training, you can also use smaller unsecured loans to help speed up the training, particularly the latter parts if needed.
After reading this, you might wonder why anyone completes integrated flight training; there are clear advantages and disadvantages for both.
If you’ve got your heart set on an integrated flight training program and can’t use a loan to fully fund it, starting on another career path and saving up over a long period can work. It seems daunting but if you start a different career at the age of eighteen and manage to save £/€10,000 a year you can start your commercial flight training at the age of twenty eight and potentially have joined an airline by the age of thirty. It will take a huge amount of perseverance and motivation but airline recruiters are very impressed with people who have shown such determination to pursue their dream job.
If you join the military as a pilot, they will pay for all your flight training and you can convert your flying experience into a commercial pilots licence when you leave. However, we would not recommend you apply to the military purely because you want to be a commercial pilot – you really need genuine motivation to become a military pilot with a full appreciation of the role and lifestyle. Ultimately you could be sent to war or be stationed all over the world.
Manually flying fast jets or heavy transport aircraft at low level is some of the ‘real flying’ you won’t experience with a commercial airline. Doing this for a number of years (be aware of the minimum service requirements) prior to transitioning to the commercial world is the ideal route for some people.
BBVA Secured Bank Loan Example
A Spanish bank called BBVA offers specific flight training loans. The key points (taken from the BBVA website) are as follows:
- Maximum amount: Full cost of the course plus living expenses if required.
- Minimum amount: £45,000
- Repayment period: Up to 10 years.
- Payment holiday: Up to 24 months. Interest will still be charged during this period
and will be added to the loan balance.
- For up to 24 months after your payment holiday, your monthly repayments can be
reduced by 25%. Interest will be charged on the unpaid monthly repayment amount
and will be added to the loan balance.
- Security will be required: We will require a first or second ranking charge or
mortgage over a property located in the UK to secure your loan. The maximum amount
we will lend is 60% of the value of the property (whether for a first or second ranking
charge). We do not offer unsecured lending for pilot training loans.
- Interest: Bank of England Base Rate (variable) plus 2.5% per annum.