Graham Warwick/WASHINGTON DC
Changes in the military flight simulation industry in recent years have been as much about the way it does business as the technology it uses. Customers are increasingly viewing training as something that is paid for when needed, rather than requiring up-front investment.
Whether it is called fee-for-service, "private finance initiative" or "public/private partnership", the transfer of the investment burden from the customer to the supplier is accelerating - and spreading. And the shift is changing the nature of the simulation industry.
The UK has taken the lead in persuading the industry to finance the construction of simulator centres in return for long-term training contracts. The Ministry of Defence, for example, has turned over to industry the responsibility for financing, constructing and operating five major training programmes:
the Defence Helicopter Flying School (DHFS) at RAF Shawbury is operated by the FR Aviation-led FBS consortium and equipped with Bell 412EP and Eurocopter AS350BB helicopter and associated training devices; the Medium Support Helicopter Aircrew Training Facility (MSHATF), under construction at RAF Benson by the CAE Electronics-led CVS consortium, is to be equipped with five flight simulators for the Aerospatiale Puma, Boeing Chinook and EH Industries Merlin; the British Aerospace Hawk training school at RAF Valley is to be constructed, equipped with training devices and operated by Reflectone UK; the WAH-64 Apache attack helicopter training system will be installed at several British Army bases and operated by Aviation Training International, a joint venture formed by prime contractors Boeing and GKN Westland; the Panavia Tornado GR4 training system, together with Thomson Training & Simulation (TTS), has been selected as the preferred bidder to equip and operate simulator centres at RAF Lossiemouth and RAF Marham. Together, these programmes are valued at about $3 billion. Typically, the contracts last from 20 to 40 years, with contractors commercially financing the construction and equipping the training centres, and the services paying for training use once the centres are operational. Generally, the military supplies the instructors and industry maintains the equipment.
FEE FOR SERVICE
The US Department of Defense (DoD) has used "contractorised" training for years, but has almost always bought the training equipment first, then hired contractors to operate it. This is changing. The US Air Force's F-15C Contracted Training and Simulation Service programme, awarded one year ago to Boeing, is one of the first in which industry is financing the construction of training systems in return for a fee-for-service contract.
The F-15 contract was also the first to be awarded under the USAF's Distributed Mission Training (DMT) programme, which involves the networking of multiple simulators to allow multi-ship training. Boeing's initial seven-year, $330 million contract is to install and operate two four-ship sets of networked F-15C mission trainers at Eglin AFB and Langley AFB. Beginning in May 1999, the USAF will begin paying for training on these devices. If the programme is successful, a further 46 devices could be added and the training services contract extended to 15 years.
The USAF plans to expand the DMT concept, with the next programme expected to be awarded in March or April next year under the F-16 Mission Training Centre programme. Each centre will have four F-16 training devices, and plans call for more than 50 networked cockpits at 10 locations. Eventually, the DMT concept is to be expanded to include the A-10, F-15E and other air force types.
The USAF is also changing the way it buys, supports and upgrades training systems, in a bid to streamline the acquisition process, to reduce delivery times and so improve concurrency between aircraft and simulators. Under the Training Systems Acquisition (TSA) programme, five teams have been pre-qualified to bid for contracts worth up to $486 million over the next five years to build, maintain and upgrade flight simulation systems. This "indefinite delivery/indefinite quantity" contracting vehicle limits competition for this business to Boeing, Lockheed Martin and Raytheon Systems, with Camber and Intelx competing for small business set-aside contracts.
One of the first contracts awarded under the TSA programme went to Raytheon, to evaluate upgrades required to improve the fidelity of A-10 unit training devices.
The US Navy, meanwhile, is sticking with its successful "buy through the prime" approach to acquiring training systems. This was adopted in 1987 to overcome the late deliveries and lack of concurrency the navy had suffered through buying its simulators independently of the aircraft prime contractors.
Buying through the prime does not mean buying from the prime, the navy stresses. The primes are made responsible for developing and supporting the training system, but must complete the first article. Recent examples include Bell Boeing's selection of FlightSafety International to supply the simulator for the US Marine Corps' MV-22 Osprey tilt-rotor.
Under the buy-through-prime approach, Boeing is developing the training system for the improved F/A-18E/F as an upgrade to the existing F/A-18C/D training system, working with the same suppliers, including Raytheon and Reflectone for the devices. The aim is to have the first training system in place and concurrent with the aircraft when the F/A-18E/F enters service in 2001.
To improve training, reduce costs, speed up delivery and ensure concurrency, training system design is now being addressed earlier in aircraft development. This is requiring prime contractors to form teaming relationships with simulation suppliers. Lockheed Martin and Boeing are working closely with Raytheon on the F-22 pilot and maintenance training systems for the US Air Force, ahead of its entry into service in 2005. Having a contractor run the training system is being examined as a way of reducing F-22 programme costs.
Separately, Boeing and Lockheed Martin are already working with simulation suppliers on training system designs to support their rival bids for the Joint Strike Fighter (JSF) development contract, scheduled to be awarded in 2001. Participation is not restricted to US companies, as the US/UK JSF programme is expected to have substantial international involvement.
International teaming is a key element of Bombardier's NATO Flying Training in Canada (NFTC) programme, under which it will operate a fast-jet pilot training system and sell its services to Canada, Denmark and, potentially, other NATO nations. Bombardier is financing the acquisition of Raytheon T-6 basic trainers, British Aerospace Hawk advanced trainers and CAE simulators for both aircraft, with the suppliers supporting their products through the programme's life. The privately financed NFTC is to become operational at CFB Moose Jaw late next year.
SHIFTING THE BURDEN
The shift of the financing burden from government to industry, the move to streamline acquisition by pre-qualifying competitors and the demand for teaming during aircraft development are expected lead to a shake-out in the US military flight simulation industry. A recent survey by market forecasters Frost & Sullivan identified 42 companies participating in the US military flight simulation market and predicted a consolidation.
"Those companies which cannot keep up with the new trends [of distributed mission training and fee-for-service training] will lose market share and eventually be forced out of the market completely," predicts Mountain View, California-based Frost & Sullivan.
"To remain in the race, competitors must seek opportunities for partnerships and alliances to compete with acquisitions and mergers taking place."
Teaming is not restricted to the smaller players. Lockheed Martin has emerged from a series of mergers as one of the largest US simulation companies, having absorbed the training businesses of first GE Aerospace then Loral, but it has teamed with TTS to pursue the USAF's F-16 Mission Training Centre programme. This is an outgrowth of their relationship on Lockheed Martin's F-16 Mid-Life Update (MLU) programme, with TTS supplying training devices to the European MLU customers.
Lockheed Martin has also teamed up with Reflectone to offer customers for its C-130J transport aircraft a complete training package. The UK is the launch customer and Italy is also planning to take advantage of the package deal. Australia, meanwhile, elected to buy its C-130J simulator from CAE as part of a package including a Boeing 707 simulator.
CAE's purchase of a local company has boosted its presence in Australia, where it has also sold a Sikorsky S-70 simulator, this time to the army. This underlines another recent industry trend - the need to demonstrate commitment both to the customer and the country to win export orders. TTS bought Australian company Wormald after being selected to supply a simulator for the air force's upgraded P-3C.
In Europe, attention is focused on key programmes that promise to reshape the region's simulation industry in a similar way to the acquisition changes under way in the USA. The first of these to reach fruition is the Eurofighter Aircrew Synthetic Training Aids (ASTA) programme, which has been won by a joint venture bringing together Europe's major simulation companies. Eurofighter Simulation Systems includes Anglo-French TTS, Spain's Indra, Italy's Meteor and AGE, a combination of STN Atlas and CAE's German arm.
The venture is 26% owned by TTS, 26% by Indra (in which TTS has a stake) and 24% each by Meteor and AGE. The company will work with Eurofighter partner company Daimler-Chrysler Aerospace (Dasa) to develop a suite of training aids - essentially unit-level trainers of varying fidelity - for the four customer nations, Germany, Italy, Spain and the UK. Dasa will provide the weapons system simulation to be used in the training aids. Each of the four nations plan their own training systems, but will use a common suite of devices.
This coming together of Europe's simulation industry does not signal an end to its traditional nationalistic rivalry. The partners in the Euro-fighter venture find themselves competing for Europe's next big prize, the Eurocopter Tiger attack helicopter training system. This competition, expected to be decided next year, pits a TTS/STN venture against CAE Germany teamed with France's Sogitec. The French and German armies plan to establish a joint Tiger training centre in France. The same two teams are expected, 12 to 18 months later, to form the core of the competition to supply training systems for the NH Industries NH90 helicopter now under development for France, Germany, Italy and Spain.
The other major question still to be settled in Europe is who will supply the training system for France's Dassault Rafale combat aircraft - Sogitec, TTS or a combination of both? The two companies competed to supply simulators for Dassault's Mirage 2000 fighter. They have also co-operated on some programmes, but are jockeying for position on the Rafale programme. TTS and Sogitec are, respectively, part of the rival Thomson/Alcatel and Aerospatiale/Dassault/Matra blocs emerging from the consolidation of the French industry, so the prospects for co-operation are far from clear.
Dassault subsidiary Sogitec's credentials for a leading role in the Rafale training system have been boosted by its winning the contract to supply a Mirage 2000-9 simulator to the United Arab Emirates. This is one of very few international military flight simulator contracts placed so far this year. Business has been hit by the Asian economic crisis and its knock-on effects in other regions.
The Asian economy is expected to recover, and with it the region's developing taste for flight simulation products. Singapore still plans to proceed with its Integrated Fighter Training programme to acquire up to 12 networked simulators for the F-16, F-5 and A-4. The programme is intended to overcome the island nation's lack of airspace by allowing tactical training to be conducted using networked simulators. This is confirmation that interest in distributed mission training is spreading beyond the USA and Europe.
Source: Flight International
