Flight School Model

A flight school financial model captures the seven-year operating economics and intrinsic value of a Part 141 flight training academy that takes ab-initio students from zero time through the commercial pilot certificate, rents aircraft to already-certificated pilots between lessons, and sells ground school. This one is built around the constraint that actually binds such a business: certificated flight instructors. It runs a training ladder, a live instructor roll-forward with airline attrition, a rationing rule for new enrolments, an hours-driven cost stack, a usage-metered engine overhaul reserve, and an unlevered DCF to enterprise value and value per share.

Aircraft can be bought; instructors largely cannot. Almost every CFI on a training line is a commercial graduate of the school itself, hired the year after certificating and gone to a regional airline roughly eighteen months later. That makes the instructor pool endogenous - it is produced by the school's own student pipeline two stages upstream - so the size of this year's graduating class was fixed by enrolment decisions three years ago. The model keeps the fleet as a policy schedule that never binds, with a derived aircraft-required row sitting below the fleet in every year, so there is exactly one live constraint and it is unambiguous which mechanic produced which result.

It rations new enrolments, not students already in training. Continuing instrument and commercial cohorts consume their dual hours first; whatever instruction capacity remains is divided by the hours a private student needs, and new enrolments are the lesser of demand and that figure. The shortfall is reported as enrolments turned away and as a percentage of demand. Because the turned-away students are the instrument class the school does not have next year, the commercial class it does not have the year after and the graduating class it does not have after that, a single squeeze produces a second squeeze three years later on assumptions that never changed.

Piston training engines run to a manufacturer's time between overhauls measured in flight hours, not calendar time, and then need an overhaul regardless of the date. The model pools cycle hours across the fleet, counts overhauls with a ROUNDDOWN of opening cycle hours plus the year's flight hours over TBO, carries the remainder forward, accrues a reserve at a per-hour rate on every hour flown, and pays out at an escalating overhaul cost. The rate is set in Year 1 to exactly fund an overhaul but is escalated below the inflation of the work it buys, so the funding ratio decays and the liability drains - a disclosed structural under-funding rather than a modelling error.

Year 7 capex runs well above depreciation because the fleet is still being expanded by two aircraft a year. Capitalising that raw cash flow into perpetuity would charge the business forever for a growth programme it only undertakes while scaling. The Valuation sheet therefore rebuilds a terminal-year cash flow explicitly - terminal EBIT, less unlevered tax, plus depreciation, less maintenance capex defined as closing fleet at cost over the airframe life - and excludes growth working capital on the same reasoning, so the perpetuity capitalises maintenance economics only.

Yes. Every driver is a labelled input on the Assumptions sheet wired through named ranges, so you can replace the demand, advance and pass rates, cohort seeds, instructor attrition and billable hours, the per-year retention and hiring policy rows, the fleet schedule, the rate card, every cost escalator, the working capital days and the valuation inputs with your own. The workbook recalculates end to end, and the dashboard reports enrolments turned away, instructor utilisation, the reserve funding ratio, margins, enterprise value and value per share.