Premier Flight Training have gone out of business after around two decades of operation. The Norwich airport-based flying school was set-up in 2002 and had been based at Norwich airport for over two decades. Starting out providing training for the Private Pilot Licence (PPL) and associated ratings, Premier Flight Training later went on become a CAA Approved Training Organisation (ATO) offering commercial, instrument rating and Flight Instructor rating courses and had planned to begin offering a pilot degree programme in 2024. However, signs of financial distress began to appear last year when it was claimed that some of the school’s fleet of aircraft had been removed by the owners. A number of on-line reviews claimed that customers had not received flying hours that had been pre-paid and the company failed to file accounts which had been due by 31st December, it appears that Companies House began action to have the company struck-off.
The company claims to have ceased trading in December 2023, blaming the effects of the COVID-19 pandemic; poor weather in 2023 and the arrival of a local competitor. However, the company could not afford to fund a Creditors Voluntary Liquidation. In February the company sold its training manuals and other assorted training equipment to locally based Saxon Air. A Companies House ‘striking-off’ action was suspended in March 2024, but the formal end came in early May when liquidators were appointed and a resolution was agreed for the company to be wound-up. Since that appointment, two simulators with a ‘book value’ of £36,000 have been sold to Saxon Air for £1000. The financial state of the company is now becoming apparent as the liquidators carry out their work. The liquidators have calculated that the company’s assets (primarily a financed PA34 Seneca aircraft; plant and equipment and cash held in a client account) are worth around £7000. Against this, total liabilities are estimated at over £466,000, giving a net deficiency of just under £460,000.
Creditors to the company include the usual assortment of banks, suppliers, finance companies and the airport as landlord. Other notable unpaid creditors include over £30,000 due in taxes to HMRC, over £40,000 due to a ‘bounce back’ loan and, unusually, over £17,000 owed to Norfolk Police. Four staff are owed a total of almost £7000. The largest single creditor is the company’s director whose claim is almost £289,000 for loans made to the company. However, possibly the most striking group of creditors are the so-called ‘Consumer Creditors’, in effect former customers of Premier Flight Training who presumably had made some form of ‘up-front’ payment to the company. The liquidators describe this group thus: “The Company has taken payment on account for its students that is then used as and when the students are flying in the aircraft and receiving their tuition.” The liquidators say that there are 68 known ‘Consumer Creditors’, owed a total of just under £65,000. The largest single amount owed to one of these former customers appears to be just over £7,000.
Although the amount of money owed to former customers is far smaller than those involved in the collapses last year of Tayside Aviation and FTA Global; the loss of customer’s money in this way has re-ignited concerns over the practice of flying schools holding significant amounts of money in ‘up-front’ payments which are not ‘ring-fenced’ in some way from the flying school’s day-to-day finances – for example in the equivalent of a ‘escrow’ or ‘client’ account. FTN further understands that some customers who had made advance payments using a credit card have been denied a refund by their credit card company. Attention has also been drawn to the refusal of the CAA to consider the financial status of companies they approve as an ATO.
The most recent update from the liquidator offers little hope that the Consumer Creditors, or any other creditors, will get any of their money back. At the end of May the liquidator reported: “After taking into account my proposed remuneration and anticipated expenses I consider that it is unlikely that I will be able to make a distribution to any class of creditor.”
