CAPT Program hits financial bumps

March 31, 2009

A Florida flight school catering to mostly Chinese students is fighting to stay in business after three months of financial turmoil. Known as the CAPT (Commercial Airline Pilot Training) Program operated by FTS (Flight Training Services) International, it trained mostly foreign students but had a half-dozen domestic students and eight from Kazakhstan.

The training facility at Flagler County Airport near Palm Coast, Fla., was originally built to Embry-Riddle Aeronautical University specifications, but the university divested itself of the CAPT program it developed and sold it to FTS in 2006. The university did not want to own a flight school. The airport did not want to transfer the lease, so Embry-Riddle agreed to remain, on paper at least, technically responsible for the lease. FTS International paid the lease fee directly to the Flagler County Airport, not to Embry-Riddle. An Embry Riddle spokesman emphasized that the university is “…one-hundred percent focused” on university activities and has nothing to do with the CAPT Program at Flagler County Airport. FTS International owes back lease payments.

Of primary concern this week are the Chinese students remaining at the school. Visas are expiring, they face eviction from their apartments, and they can find little information on what is happening. Evictions started March 31.

Early this year a local newspaper reported the school had 160 students, but by mid-March a visitor was told the school was down to fewer than 90. Their tuition and even their daily food allowance were paid directly by the Chinese to the school, which now no longer has most of the money. Domestic students paid out of their own pocket.

In mid-March a plan was developed to give the domestic students 25 percent of the refund owed as soon as possible and the remaining funds over a period of time. In that way, the school would also be able to make small payments to vendors, employees, and Flagler County Airport.

That plan was superseded when a key investor walked away from the financial recovery plan. That, in turn, forced a second investor to leave the effort, leaving only the third investor as the sole source of funds.

Calls to phone numbers inside the school this week were not returned despite an observer noting a large group of students walking to the facility from their apartment house and entering on the same day the calls were made. It later was learned that the students were part of a peaceful protest to demand information. They walked to the school because calling for the school shuttle bus would have alerted school officials to their plan. At that time only the students from Kazakhstan were still training, but Air Astana pulled its students from the school the same day, March 31.

The problem seems to stem from training contracts negotiated by two Chinese airlines and a Chinese university that were at or below cost. That, in turn, may have led to a slowdown in training that led Chinese sponsors of the students to withdraw students from the program. American students who once attended the school also confirmed that training was taking longer to complete than they expected. One of the students suggested bankruptcy was imminent this week if funds were not found.