ATP Financial Situation

psunder

New Member
Hello to all, even though this is my first post I have visited this board many, many times in my quest to find a school. While I won't bore anyone with the reasons I have decided to attend ATP I will say I have visited the school (JAX) and have asked a lot of tough questions of them. With that said, there is one question yet to be answered and, with the recent debacle at ATA, the MOST important question as far as I am concerned.

I have asked several individuals at ATP for financials or the equivalent so as to verify that they are solvent and in overall decent financial shape. The answer I have gotten is that, since they are a private organization, they do not and will not provide such information. This, to me, seems a bit odd since their excuse so far has been that "private institutions do not provide financials"..... a patently false statement. While it is true that some do not, many do. I, for one, would be more than willing to offer such a reassurance for a potential student if I thought it was the last piece of the puzzle they were looking for in their decision making process. So, then, the obvious question is why won’t they provide me with financials? I would be a fool to not assume the worst.

My request, to any of you in-the-know, would be to provide any information (anecdotal, financial, or other) that might begin to shed some light on exactly where APT stands financially…..


Pete
 

pscraig

Well-Known Member
This is a logical question to ask about a school, and one I had recently. Private companies are not obligated to disclose any financial information whatsoever, so you have to look deeper. Here are my observations:

ATP runs without most of the overhead of other schools. Their facilites are comfortable and adequate, but don't have the expensive corporate look. This is a good thing, since many of the schools with heavy overhead are now sinking, and ATA is only the latest casualty. At other large schools, it's suprising how many admin staff are needed to keep 100 planes in the air.

Also look at the schedule. I recently scheduled some training at one of their offices, and did not have a big selection of time slots-in fact I will have to wait 6 weeks. If they were ready to sign me up next week, that would indicate a lack of demand which does not seem to be the case.
 

blee256

Well-Known Member
yeah, i have noticed that ATP doesnt disclose a lot of information. Like CFI pay, financial records, and one member on this board asked to see the call center and the admin offices are were denied. I understand not disclosing financial records (would you let just anyone look at your bank account?), and CFI pay, not too many places disclose how much they pay their employees. but not letting a potential student see the call center is kinda strange.

Anyways, I dont think its that big of a deal. If comair/ FSI/ PAIFA/ATP closed, it would be sad, but not that big a deal because you could just pack up and move to a different academy. Just like how people change FBO's when training. I think the sad part about ATA closing is the fact that they ask students to pay the whole fee up front. So students there lost out on 60K. WHereas FSI/ PAIFA/ Comair is pay as you go. ATP has payment dates as well. So if the closed out you might be out a couple thousand, depending howmuch you put on your account, but thats bearable, compared to all 60K like at ATA.

So I wouldnt sweat it.

-Brian
 

psunder

New Member
You are correct, they are not required to provide financials, however if they wish to get me on board they will need to provide them to me….. I was scared before the ATA fiasco, now I’m scared shi*less.

One thing that is worrying me is the fact that ATP took possession of 10 new Seminoles in March of 2001 with an option for 10 more at years end (did they buy those additional 10?), the largest fleet sale of Seminole aircraft in New Piper history. Prior to September 11 this probably made sense, but how is this affecting them now?

Another issue is the fact that, as I understand it, ATP can draw from any loans I might have to the tune of any amount the wish without even asking me….. other than common decency what’s to stop an organization from drawing my loan to zero before they go belly-up? In addition, what is the typical disbursement schedule ATP follows?

I must make clear that I have no tangible reason to suspect ATP to be financially precarious… I just can’t get off the decision fence without more information.

Pete
 

blee256

Well-Known Member
Here is the payment schedule.

Deposit to Reserve Class Date (nonrefundable) $1,000
Upon Arrival $5,995
2 Weeks After Start Date $7,000
4 Weeks After Start Date $7,000
6 Weeks After Start Date $12,000

Airline Career Pilot Program $32,995


I pulled a loan from a bank to attend there (I start in April). And that is how the bank pays ur loan. Its agrred upon in your promissay note or some document. So you do get it in writing on how you are going to pay. I know you are sketched about ATA going belly up. And its smart that you are doing your homework, but ATA was having problems before this. And it is rumored that ATA was using students tuition to fund their airline, Discover Air. OF couse this is all hearsay on my part. But I am not too worried about ATP. Not at all and I am excited to start.

-brian
 

SigAV8R

New Member
One thing to consider is the condition of the airplanes. If the company was not in a financially sound position, the quality of the equipment would be going down hill. Take a look at ANY ONE of the newer Seminoles (or even the old ones for that matter) and you'll see they're in excellent shape. Another thing for ATP is that they operate 21 locations across the country. Again, the offices and apartments are not extravagant...but they are pretty nice.
 

blee256

Well-Known Member
[ QUOTE ]
Are you getting excited blee?

[/ QUOTE ]

Very excited, but not looking forward to driving across country. I wish someone started in April with me. Its not like we're met, but at least we could use jetcareers.com as an ice breaker. ya know?

-brian
 

secretapproach

New Member
[ QUOTE ]
[ QUOTE ]
Are you getting excited blee?

[/ QUOTE ]

Very excited, but not looking forward to driving across country. I wish someone started in April with me. Its not like we're met, but at least we could use jetcareers.com as an ice breaker. ya know?
-brian

[/ QUOTE ]

You could just use airplanes as the icebreaker. I bet that would work.
 

Soonermurph

New Member
Here's a tip about discovering how financially stable a flight school is. Look in the airplane for the registration. If the owner is the school, the school has assets. If the owner is a leasing company (see ATA), the planes are leased and the company has no assets to collect against if things go wrong. ATP ownes every airplane in the fleet (no liens, no leases). If you figure that the average price for a Seminole is around $400,000 and ATP ownes over 60 of them (along with a Citation) then the company has _____ worth; oh well you do the math.
 

psunder

New Member
It is completely irrelevant if the school owns aircraft if they are still paying on them!!! As a mater of fact, a leased aircraft is most often preferable since the school can easily expand and contract with much greater ease (think post Sept. 11), and there is greater liquidity. I seriously doubt that ATP has paid off all of their aircraft considering that they purchased 20 new Seminoles in pre-sept-11 2001, the largest fleet purchase in New Pipers history!

I must reiterate, I believe ATP to be in at least decent shape since they apparently have been purchasing even more Seminoles (ones that were earmarked for ATA) however one cannot rule out fiscal stupidity, therefore I will not ASSUME anything. Never-the-less, I appreciate the comments and responses since it helps me to slowly build a better picture.

Pete
 

Soonermurph

New Member
Again I say, ATP ownes every plane, no liens (purchase money or any other kind) and no leased planes. Check out FAA.gov under aircraft registration. See how many Seminoles ATP ownes.
 

stuckingfk

Well-Known Member
If I am not mistaken, you can still own an aircraft while concurrently be paying the bank for the loan out for the planes. Correct me if I am wrong.
 

Derg

Cap, Roci
Staff member
I think so, it's probably like buying a home. I own my home, but my mortgage company has a lien against it.

Or something like that.. I dunno.
 

psunder

New Member
The problem is that if ATP owns their aircraft (which I agree they do) then they cannot easily and readily shed aircraft like you can with a lease. Although there is a market for the sale of aircraft there is not what we call a “developed market”, aircraft are not readily convertible to cash such as a mortgage might be. Moreover, the business has to deal with the fact that in a pinch what they get for the aircraft when they do sell them will be determined by market value (aircraft depreciate!) making for the possibility of actually losing money when they sell the aircraft.

A leased aircraft fleet, on the other hand, can (depending on lease terms) be readily or semi-readily increased or decreased to meet market demand. This provides flexibility and allows a business to more readily match market demand.

Although I have said it twice already, I will say it again – ATP BOUGHT 20 NEW SEMINOLES PRE-SEPT 11 , 2001 (A MASSIVE COMMITMENT BY ANY STANDARDS) AND IT IS VERY LIKELY THEY ARE STILL PAYING THEM OFF AND WILL BE FOR SOME TIME. Even if this was a wise decision at the time, one would be foolish not to question the schools ability to meet their payment schedule post Sept. 11. History is littered with good business killed by cash flow and solvency problems even while other aspects of the organization were good.

I certainly do not want to suggest that aircraft ownership is necessarily a bad thing. Ownership is typically less costly than a comparable lease. Ownership also represents an investment and people tend to take care of their investments; that would most likely mean well maintained aircraft. Other things such as greater asset control and tax implications also favor the ownership route.
 

Soonermurph

New Member
You are way off base. Here is a little lesson on Bankruptcy, we will call it Ch7 101. When a company files for ch7 protection with no assets (just like ATA). The end result, creditors (students who have paid money and are owed training) get screwed. During bankruptcy, the trustee will gather all of the assets of the company and liquidate them. Priority Creditors like purchase money lien holders get first priority on the funds. Then, with what is left, non-priority creditors, like flight students, are reimbursed.

ATA didn't own any aircraft; they leased them. So, the Bankruptcy trustee assigned to the case has nothing to liquidate and nobody gets any money. However, if a company has substantial assets (see ATP) the creditors have a kind of insurance policy against getting shut out of the Bankruptcy.

Additionally, ATP's planes don't have liens on them. That means that there would be no priority creditors to stand in line behind if they were to file BK. ATP's planes are like an insurance policy against getting screwed like the ATA students did. ATP has withstood the 9/11 attacks and has actually expanded its fleet instead of liquidating. I know in fact that they got great deals on Seminoles that were originally headed to other "big name" flight acedemies. I will withhold their names to protect the innocent. The bottom line is, I would be very nervous about handing over large amounts of money to a school that leases their planes and other equipment. You are potentially placing yourself in another ATA situation. That all I have to say about that. By the way, I practiced law for nine years before becoming a pilot.
 
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