Baloo makes his approach into Cape Suzette a little too fast and is pulled over by the police for speeding. Baloo applies his charm and manages to avoid a speeding ticket, but is booked for flying with an expired licence instead! Baloo is grounded until he retakes his test at the Federal Licensing Agency for Pilots (FLAP).
Meanwhile, Rebecca grows increasingly annoyed at the rising cost of fuel and complains to Shere Khan. Khan explains that his tankers are being hijacked by the air pirates and the limited supply is forcing the prices up. However, Khan neglects to mention that he is actually working with Don Karnage to make his gas prices artificially high.
Baloo is confident that he'll get his licence renewed in record time, but he begins to fall apart when he discovers his examiner is his old drivers-ed teacher, Ralph "Love to Flunk 'em" Throgmorton. Baloo remembers that Throgmorton likes everything done alphabetically and "by the book". This makes Baloo nervous and he fails the test.
Unable to fly, Baloo tries a number of new jobs but on each occasion he has to serve Ralph Throgmorton. His insistence that Baloo perform his job alphabetically causes Baloo to panic. The chaos that ensues ultimately leads to Baloo getting fired.
Eventually, Baloo gives up and heads over to Louie's where the Higher for Hire team are waiting to give him a surprise confidence-boosting party. With faith in his ability restored, Baloo returns to FLAP to retake his test. Unfortunately, the Sea Duck runs out of gas during the examination and Baloo is forced to land at the nearest island. Throgmorton is furious and starts deducting points, but Baloo is more concerned about the number of barrels on the beach. They soon discover the island is being used as a hideout for the Air Pirates and Don Karnage's "stolen" fuel.
Baloo starts rolling a barrel back to the Sea Duck which attracts the attention of the Air Pirates. Baloo refuels the Sea Duck and Throgmorton gets them airborne. With the Air Pirates in hot pursuit, Throgmorton soon discovers he can't escape them doing things "by the book" and begins to panic. Baloo takes over the controls, easily out-manoeuvring the pirates.
Throgmorton is so impressed by Baloo's ability to control the plane that he renews his pilot's licence as soon as they return to Cape Suzette. They also report Shere Khan and Don Karnage to the air police ? putting an end to the fuel crisis. In the end, Shere Khan sends Don Karnage a bomb letter.