With aircraft production booming, all these new planes are going to need someone to fly them. For CAE this means long-term stability in its civil and defense pilot training operations.
To meet this growing demand for pilots, CAE has expanded its operations with acquisitions and joint ventures and the launch of training centers around the world. Over the past few years, the company has added facilities in Brunei, Spain, India, Seoul, and Thailand. In addition, the company has expanded with acquisitions, most recently completing its largest purchase ever with the acquisition of Bombardier Business Aircraft Training.
Acquired for $645 million, Bombardier’s Business Aircraft Training (BAT) dramatically expands CAE’s presence in the business jet training market. The Bombardier BAT operation includes a modern fleet of full-flight simulators (FFSs) and training devices covering the Learjet, Challenger and Global product lines, including the latest large-cabin Global 5500, 6500 and 7500 business jets. CAE added 12 Bombardier business aviation FFSs located in Dallas and Montreal to its training network (including one deployment already planned for CAE’s fiscal year 2021), for a total of 29 Bombardier business aviation full-flight simulators.
According to CAE’s Pilot Demand Outlook, the company foresees a need for 50,000 new business aviation pilots over the next 10 years. With BAT now part of its training portfolio, the company is well positioned to meet the long-term and growing market demand for business aviation pilots.
In the defense sector, the company grew with the mid-2018 acquisition of Alpha-Omega Change Engineering (AOCE) in the USA. The acquisition has enhanced CAE’s core capabilities as a training systems integrator, especially on military aircraft, while at the same time expanding the company’s presence in U.S. defense markets. The purchase immediately made CAE a prime contractor on a range of U.S. programs, including Maintenance and Aircrew Training at Kirtland/Davis-Monthan/Joint Base Andrews/Moody (KDAM) in support of the Air Force Special Operations Command Aircrew Training and Rehearsal Support (ATARS) program. CAE also recently won a U.S. Army Space & Missile Defense Command contract to provide engineering and operational support services and a U.S. Air Force contract to provide training and courseware development for F-15, F-16, and F-22 aircrews.
Following this purchase, CAE USA established a new subsidiary, CAE USA Mission Solutions Inc, which operates under a Proxy Agreement with the United States government. The Proxy Agreement enables Mission Solutions to pursue and execute higher-level security programs. This unit also encompasses the C-130 Hercules training center in Tampa, Florida. CAE USA has a long-term teaming agreement with Lockheed Martin to be the training provider for the new C-130J Hercules aircraft.
Overall, these expansion efforts have strengthened CAE’s leadership and global reach in civil and military aviation training by increasing the company’s training center footprint and growing its ab initio flight training network.
With governments looking to keep spending in check, CAE has been shifting to provide integrated training systems for these clients. Military operations continue to simmer around the world, and the demand for military training and simulation is matching pace. Thus, the need for virtual and simulation-based training will likely grow. Further, the ability to network simulators for joint training will only increase the attractiveness of CAE’s systems to military officials. Finally, increased fuel costs, vehicle wear and tear, and environmental impacts will be yet more factors in the drive to increase the use of simulation products for training.
As it looks ahead, CAE is largely focusing on its core markets. The company had expanded into data mining simulation, but has since sold the operation after five years in the market. The company does have a minority stake in the healthcare market, and it is looking to grow its healthcare unit as a way to better diversify CAE’s portfolio away from aerospace.
Overall, CAE has maintained a strong balance between civil and military training and simulation. This diversification and CAE’s ability to maintain equilibrium continue to serve the company well.