I am probably not explaining myself clearly enough 
IF you accept advance payments for discounted training, or sell “pleasure flight” vouchers, where does that money go? You have precisely TWO options:
If you do the 2nd one then the business doesn’t benefit, so why offer the discount? There is a small incentive for people to continue with their training if they paid up front, but it’s IMHO negligible if they can have their money back at any time.
Which of the two do the “clubs” in Norway and Sweden do?
If they do the 1st one, how do you refund 100% of the money if some external factor forces the closure of the “club”?
It is really quite simple. The money is either 100% still in the bank, or it isn’t.
LeSving wrote:
I don’t know about Sweden, or France or Germany or anywhere else, but in Norway there are no laws specifically governing how such clubs shall be organized or run, it’s all up to the people starting it. In legal terms, the word club has no meaning, another term is used legally: “Forening” which google translates to association, which probably is a good translation, but not necessarily accurate legally. For an association to be a legal entity, it has to be registered, and that’s the only laws about it.
The situation in Sweden is essentially the same as in Norway. However, to get tax-exempt status the association has to be – what can be loosely translated as – an “idealistic association for the public benefit” (“allmännyttig ideell förening”). This means that it has to be non-profit, that it has to be democratically run, that it must basically accept anyone as a member, that its purpose must be beneficial to the public. Also – with very minor exceptions – its activities must further the purpose and its earning must be used to further the purpose. Examples of such purposes are sports (that where flying clubs fit in), culture, religion, social work, politics, defense, research etc.
Peter wrote:
If they do the 1st one, how do you refund 100% of the money if some external factor forces the closure of the “club”?
We sell our aircraft.
Not strictly related to the topic but I heard strange thing few days ago in one flight school in Croatia. People, from countries that have strict visa regime with EU, apply for PPL to get student visa (and pay some money in advance) and then, after entering country and confirming their status, just disappear.
In my club we try to have members sign up for a subscription which gives them a lower price for the flight time. We try to get it early in the year and use the money when we need it. It is in general not refundable. That would be option nr 1 in Peter’s post. If the aeroclub goes bankrupt there is probably no refund for the member.
But the important difference is that they are members of the club and not customers. They are share holders/owners.
Emir wrote:
People, from countries that have strict visa regime with EU, apply for PPL to get student visa (and pay some money in advance) and then, after entering country and confirming their status, just disappear.
Wouldn’t surprise me if this was also the case in the UK. The UK is full of sham ‘academies’ mostly catering to S Asian clients.
If
If the aeroclub goes bankrupt there is probably no refund for the member.
then
But the important difference is that they are members of the club and not customers. They are share holders/owners.
is not an advantage which is immediately obvious to me
You need to be a “member” of a flying school here too, generally.
Wouldn’t surprise me if this was also the case in the UK. The UK is full of sham ‘academies’ mostly catering to S Asian clients.
Yes; always been big over here (get a student visa and then vanish). Interestingly though, most of the fake certificates for sale on EuroGA (before we moved to “human approval” of all new signups to deal with the ever growing problem) were from US institutions.
But I doubt it is big in flight training here. I have not heard of schools getting students book, arrive and then vanish. Especially not PPL schools, which from what I can see are almost 100% UK locals. And getting a CPL/IR (the “ATPL” schools here are mostly “non European” students) is an awfully long way round to entering the UK
It’s the 1st one that is used.
In principle, or theory, the money can be used 100% and the club closes within the same time frame. In theory the money can be lost. I have never heard of such a thing happening though. There is always some company going bust, and people lose money, but aeroclubs? never heard about it.
To be fair though, I am in the middle of a slightly similar, yet principally different experience with the local marina. I have a spot there for a boat, and my father also do. My father is old and incapacitated, so I wanted to sell his spot. That was easier said than done. The marina is organized as an association, as an aeroclub.
Historically spots in marinas are high in demand, extremely so from time to time. So, through the usual democratic process, by all members, they (or more precisely: we) decided a process where all selling and buying of spots was to go through the marina, and the prices should be fixed. This was the only fair thing to do for all the members of the marina (remember a member is an owner, and there are lots of other stuff there: “restaurant”, fuel, shop, sleep overs, and so on). The first one who buys a new spot, purchases this from the marina. When this is sold, it is sold to another person, but at the fixed price and organized by the marina. This was to prevent people starting to speculate in selling and buying spots. This has happened lots of places, with the end result that the marina is void of active boating people. This worked just fine for many years. Prices for spots were steadily growing, although very reasonable, a nice little investment, better than putting money in the bank.
But, the marina was very popular, and it needed to grow. It was almost tripled in size a few years ago, at a substantial cost. At the same time, lots of other marinas also was made in the fjord close by, so today there are more spots than the demand In other words, the prices for spots are higher than the market is willing to pay. There are no buyers, and the existing marina members don’t want to lower the prizes, and loosing money. A fine example of Staling economy gone wrong, only in the opposite direction The marina is de facto bust (from an economical point of view): Zero or negative liquidity and assets. It has used huge amount of money on spots that aren’t sold.
Anyway, the result for me, is that it’s impossible to sell my father’s spot. In a “free market” I would have sold it, but at the fraction of the original value I guess, so maybe I wouldn’t after all? This is potentially a never ending situation. The spot could stay in the family for decades to come, with no chance of getting the assets back. This is the way we decided it to be, only we didn’t anticipate the market would collapse
The marina is technically bust, but it cannot go bust, there is no prerequisite for an association to be solvent, so it is still there and fully operational (it will eventually get on it’s feet, it’s just that in the current market it takes 20 years instead of 1 year). A similar situation could of course happen to an aeroclub with pre-payment and larger loans than it can manage. But an aeroclub is easier, just sell all the aircraft.
I was a member of a Swiss aero club for 10 years. They are entirely different things than the British clubs. Thy are membership associations, and have a secure base of income from membership fees, think 200 members paying a few hundred SFr a year, then a small profit margin on each hour of flight in the club owned planes (7 in the case of the club | belonged to ) and probably some nice margin on fuel sales. Many of the normal expense items (admin, training ) are done on an unpaid volunteer basis. A big committee of responsible people ensures everything is done in a reasonable manner. AFAIK the Swiss clubs like this have survived for many decades, and they are wonderful institutions. There must be dozens and dozens of them scattered across the country.
gallois wrote:
However, in typical French bureucratic style most French clubs are Associations and there are laws which govern them.
One big difference is that (outside of the Eastern ex-German parts of France that have their own local laws on these matters), members of an “association loi 1901” are not liable for the debts of the association!
