In a market characterised by high fuel costs, a growing shortage of pilots and record order backlogs for Boeing and Airbus, the outlook is positive for CAE, whose Canadian-headquartered simulation and training business is thriving.
Marc Parent, group president, simulation products and military training & services, says that simulation has a significant role to play in helping to address the pilot shortage, for example: “In the civil market, the growing shortage of pilots is a major concern and this shortage will be addressed in large part with simulation-based training programmes.
“Of course, the high cost of fuel makes the already attractive cost advantages of simulation even better. Boeing and Airbus have record order backlogs, which translate to steady simulator sales over the near to mid-term as the approximately 7,000 aircraft are delivered.”
CAE’s customer base has evolved significantly in recent years, losing its reliance on the North American market and US legacy carriers. Increasingly the company is seeing its order book swelled by non-US orders, a trend mirroring the civil aircraft backlog, which is strongest away from North America.
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As if to underscore the global nature of the business, since 9/11 CAE has sold more than 160 full-flight simulators including only six simulators for US legacy carriers. But that doesn’t mean the business is turning its back on the US market, Parent argues: “We have continued to invest in our relationships with the US carriers and we will be ready to work with them when they eventually re-equip their fleets.
“We are listening carefully to customers, working with them to help them adapt their business models to the current environment. A number of our long-standing customers have already approached us to help them find ways to lower their costs and they are increasingly more receptive to new ideas that go beyond the traditional sale of equipment. We are uniquely positioned to create value for our customers as no other company can bring to bear the multitude of solutions that exist at CAE.
In the military field CAE believes an increasing use of modelling and simulation for analysis, training and operations will drive future growth. The high operational demand being placed on aircraft, the pressure to maintain a high state of readiness and the dangerous nature of some missions mean simulation is increasingly seen as a solution to these challenges, the company says.
CAE’s military order intake increased by 20% last year and Parent confirms that the strategy is to focus on key areas of expertise, including helicopters, transports and maritime patrol aircraft. “We have also developed strategic relationships with key OEMs. You will see that a significant percentage of our order intake relates to helicopter simulation, such as programmes we have won to develop MH-60S/R simulators for the US Navy and MRH90 training systems for Australia. Our strong relationship with Lockheed Martin on the C-130 Hercules aircraft continues to deliver simulation and training opportunities for this aircraft globally.”
CAE’s decision to launch the single largest research and development effort in its history, Project Phoenix, would appear to be paying dividends with the introduction of a suite of new products and solutions.
These include the 5000 Series, a new full-flight simulator aimed at the civil market, which entered service earlier this year, while CAE True Environment is capable of bringing an automated and comprehensive air traffic control (ATC) environment to simulators.
“The simple goal is to ensure that CAE maintains its worldwide leadership in simulation,” explains Parent. “CAE is now fully capable of training needs analysis, training media evaluation, instructional systems design, courseware development, and much more. In other words, we don’t just design and manufacture flight simulators any more.
“We see excellent growth opportunities in the military market as a training systems integrator, as evidenced by Canada’s selection of a CAE-led team as the operational training systems provider for its acquisition of transport and airlift aircraft.”
Parent says the 5000 Series is a “clean-sheet design”, created from scratch to meet specific training customer requirements. Since entering service at CAE’s training centre in Burgess Hill, southern England, it is also now operational for Qantas and Lufthansa Flight Training. “We are manufacturing 5000 Series simulators for other customers such as Ryanair, Emirates-CAE Flight Training, the Embraer-CAE Training Services joint venture that will provide Phenom VLJ training, as well as our own CAE training centres.”
Parent is quick to add CAE’s support to efforts to create more harmonised regulations governing simulation technologies. The Royal Aeronautical Society’s International Working Group (IWG) is proposing new flight simulation training device (FSTD) qualification criteria to ICAO.
“Regulations have not evolved with simulation technology and for many years now simulation technology has far outpaced what is actually required by regulations. The regulations need to evolve with a continued emphasis on enhancing safety. This is the first comprehensive review by industry, regulatory bodies, and airlines to align simulation equipment regulations with actual training tasks and technological advances and we believe the IWG has done some excellent work on behalf of all stakeholders, including the travelling public.
“The new FSTD qualification criteria will be good for airlines and third-party training centres, regulatory bodies, and simulation equipment manufacturers. Airlines and training centres will have more clarity on designing their training programmes and there will be a more uniform certification process from country to country.”
CAE expects a robust market for advanced lead-in fighter trainers over the next decade and the company is involved in developing advanced training systems for two aircraft, the Aermacchi M-346 and BAE’s Hawk 128.
“CAE was selected earlier this year Aermacchi as preferred full-mission simulator supplier for the M-346 aircraft,” Parent explains. “Initially, we are designing and manufacturing the prototype M-346 flight training device (FTD), which will feature a high-fidelity replica of the M-346 cockpit with CAE’s Medallion-6000 visual system driving a dome display that includes liquid crystal on silicon (LCoS) projectors. CAE will also provide a simulation-based development and validation environment.”
In June, the Lockheed Martin/VT Group joint venture called Ascent signed the Military Flying Training System (MFTS) private finance initiative (PFI) contract with the UK Ministry of Defence. Lockheed Martin then awarded CAE a contract to design and manufacture two Hawk 128 full-mission simulators and related training support services valued at approximately $50 million. CAE will deliver these Hawk 128 FMSs to Ascent’s new training centre at RAF Valley during 2010.
Meanwhile, CAE has a strong presence on the NH Industries NH90 helicopter programme. Parent says: “We have partnered with Thales to establish a joint venture company called Helicopter Training Media International (HTMI) for the design, development, and manufacture of NH90 training media.
“For Germany, CAE is part of an industry consortium that includes Thales, Eurocopter, and Rheinmetall Defence Electronics, which each own 25% of an operating company called Helicopter Flight Training Services (HFTS). HFTS will have responsibility for delivering NH90 training services to the German Armed Forces as well as other customers on a contract basis.
Source: Flight International