CAE, Canada's market-leading simulation and training specialist, has recorded a good half-year and looks forward to more of the same in the coming decade. Group president Don Campbell talks to Brendan Gallagher about prospects.
Q: What proportion of CAE's business is military rather than civil? How do you expect this balance to evolve over the next 10 years?
A: In the last fiscal year, military accounted for about 55% of total revenues - a growing share compared with previous years which in part reflects something of a downturn on the civil side. But I would expect our business to be roughly balanced over the decade ahead.
Q: Similarly, what is the balance between training services and simulation hardware, and how is it evolving?
A: In 2001, we were about 85% equipment and 15% training and services. Last year that had changed to 55% equipment and 45% training. We expect that trend to continue, with training and services eventually providing the major portion of our revenues in the years ahead.
Q: How confident are you that this month's Eurofighter contract will lead to business from potential Eurofighter operators such as Austria, Greece and Singapore?
A: We're the company of choice for the visual systems and the synthetic environment for the four original Eurofighter customers and we are now delivering. So we think we're well placed and we'll be looking for more Eurofighter business from new operators.
Q: What is your newly won status as preferred supplier of NH Industries NH90 training systems likely to be worth to CAE?
A: Something close to 400 NH90s are on order now and as many as 1,000 could be sold as markets open up elsewhere in Europe and beyond. Design, development and production of training systems for the first operators are expected to be worth around E450 million, to be followed by a training requirement that will be even more valuable. We and our partner Thales are currently negotiating for the design and development phase, and we expect that to lead to contracts in the not too distant future.
Q: CAE USA is the preferred training provider for the Lockheed Martin C-130J. How did you go about providing simulation and training for this radically new version of the Hercules?
A: The C-130J is essentially a new aircraft, with its glass cockpit, advanced avionics and digital environment. In developing the C-130J system, we took account of the fact that while the aircraft itself represented a significant advance, our own technology had also moved forward. CAE USA actually developed the first simulators at the same time as Lockheed Martin was developing the aircraft.
Q: You won the USAF contract for Predator UAV training in 1998 and had it renewed last year. What other UAV business have you secured? What new prospects do you have?
A: We have developed simulation testbeds for the Canadian Armed Forces and we're engaged with the US Army Research Centre. We're also dealing with another couple of countries. The USA is currently the leader in UAV applications, but many other countries are now starting to look at them more seriously.
Q: What are the particular technical challenges of producing UAV simulators and training systems?
A: The main challenge lies in the fact that the pilot is on the ground - he never gets to feel the aircraft and visualise it as he would if he were aboard a manned aircraft. This has shown up in the high rate of UAV landing incidents. Without doubt, from a training perspective it's very different from dealing with a manned aircraft.
Q: What part do you expect UAV-related products and services to play in your total business?
A: At present UAV work is a small but important part of our business. We see it growing as UAV requirements develop among US, European and other armed forces. For the next 5-10 years it's not going to be an overwhelming part of our business, but it will be a increasing one.
Q: Describe your successful one-month effort last year to develop "brownout" training for US Army Apache crews. How did you get the job done so quickly?
A: We were in the middle of a programme to upgrade Apache simulators, the first of which was at Fliegerhorst US Army base in Hanau, Germany. Our engineers there knew their business and had been trained in rapid response. The Army flew pilots with experience of the problem to Hanau, where they worked successfully with our engineers to identify the issues and develop training to deal with the brownout conditions being encountered in Iraq.
Q: Which emerging military programmes around the world represent new and as yet unaddressed opportunities for you?
A: The primary programmes must be Europe's A400M freighter and the US-led Joint Strike Fighter. There will also be opportunities arising from the Comanche cancellation - current types will probably be developed to cover some of that role.
Source: Flight Daily News
