PABC's Financial Plan for the GPPC
PABC is privately funded at present. But donors from across the industry will be needed to provide the funds for the 2-year development phase and the 3-year launch phase of the GPPC. After that 5-year period, projected revenues from testing are expected to enable the GPPC to be financially self-sustaining.
The estimated average operating cost for that 5-year period is $1.6 Million (USD) per year. As shown below, gross total cost for that 5-year period is estimated to be $ 8.0 Million (USD).
For annual test revenues to equal the yearly operating expenses, the GPPC will need to test 4,000 pilots, each paying $1,200 (USD) for the complete exam series.
The sooner we attain that annual 4,000 pilot testing rate, the fewer funds we'll need. Each year we save reduces the total startup cost by $1.6 Million (USD). If we reached the "breakeven" testing rate in the first year, the estimated startup cost could be as low as $ 3.2 Million - a savings of $ 4.8 Million.
Stakeholders can significantly impact the rate at which we reach the 4,000 level, through initiatives like those shown below:
Forecasts by ICAO, Airbus, Boeing and others predict that as the global economy recovers, the industry will require approximately 20,000 new pilots per year for the next 15-20 years. At that rate, the testing of 4,000 pilots per year is a reasonable expectation, especially if the employer and regulator recommendations above are implemented.
In addition to new pilots, some employers indicate that they plan to use the GPPC as a screening tool for the hiring of "experienced" pilots, especially those that might be eligible to upgrade quickly to command positions. And, if the GPPC is approved by state regulators as an acceptable means of satisfying their requirements for the ATP/ATPL written examination, GPPC testing rates will increase even further as first officers prepare to upgrade to captain.
This type of non-profit endeavor can be funded in many different ways. The following describes the rationale behind PABC's current plan.
- In general, the stakeholders that benefit from the GPPC should contribute to its development and launch.
- Funding should be reasonably balanced among the stakeholders so that no single stakeholder, state or organization is accorded undue influence in defining the policies or operation of the GPPC.
- Although we have restricted our description of the contributions shown here to fiscal amounts, expressed in U.S. dollars, PABC respects and accepts that in-kind donations can be equally valuable as a means of reducing operational costs.
This table shows one possible grouping of stakeholder-donors and suggests that there are at least 200 organizations in each grouping that could contribute annually to help launch this endeavor.
The chart below shows how this distribution shares the cost so that it is not overly burdensome to any single stakeholder, state or organization.
The GPPC needs to retain its independent, non-profit status and, ideally, its classification as a U.S. 501(c)(3) organization. By doing so, PABC and the GPPC will have access to government and philanthropic funds for advanced research in the assessment of learning and human performance in aerospace training and operations.
That research will, in turn, lead to advances in teaching and testing methods that will benefit the full spectrum of aerospace activities and enhance international workforce development in other business and industrial applications as well.
- The recent Royal Aeronautical Society initiative that led to the creation of ICAO Standard 9625 for Flight Simulation and Training Devices is reported to have cost $10 Million (USD).
- The GPPC will provide a comparable benefit for the training and testing of our future pilot workforce for as little as $3.2 Million (USD).
- The $3,200 (USD) donor amount is equivalent to the cost of sponsoring a continental breakfast for an industry trade show.
Clearly, the ROI justifies the expense