Ian Twombly

Refunds do exist in aviation

December 31, 2008 by Ian J. Twombly, Associate Editor

There is justice in this world. Just ask the students at ATP, the nationwide flight school dedicated to training career pilots. This week ATP announced the career pilot program students who enrolled at mid-2008 prices will be given a rebate check of up to $2,500 because the cost of avgas has dropped more than $1.50.

Can you imagine what these students must be thinking? You want to give me money back? In this economy?

When you work the math, even a student eligible for the full refund will only get around 4 percent of the course fee back. That’s not much when you’re talking almost $60,000. But, the money isn’t really the point. It’s the principle. How many of us still pay fuel surcharges at our flight schools, or on the airlines for that matter? Yet, as we’ve closely watched the price at the fuel pump decrease rapidly, the surcharges remain. Why? Maybe supply of students has dropped off, or maybe insurance rates have gone up. Then why not raise the rental rates or instructor rates? Surcharges always have been a thinly veiled way of telling customers the business needs more money but doesn’t think they’re smart enough to compare pricing with a competitor.

So as the holiday season comes to a close, I say thanks ATP for doing what’s right and continuing the merriment just a little bit longer.

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One Response to “Refunds do exist in aviation”

  1. D D K Says:

    Many flight schools have reacted to the economic downturn in the wrong way. In response to decreased enrollment or aircraft utilization and in an effort to pay fixed costs, flight schools have jacked up their rates despite steep reductions in the cost of fuel.

    Such actions are reactionary and are more emotional decisions rather than a rational ones made in good business sense. Businesses which raise rates during tough economic times, when the prices of other goods are declining due to decreased demand, enter what’s known as a “death spiral” — continued price increases matching ever dwindling demand.

    The response to such downturns should actually be the opposite. Flight schools need to reduce prices in order to generate a level of demand to bring them back to profitability. Much like an engine failure – you shouldn’t follow your instincts – push on the stick, don’t yank it back!

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