“We’re going after FlightSafety,” Nick Leontidis, CAE’s executive vice president of civil aviation training and equipment, told AIN. “They may have created the business aviation simulation market, but we believe we have a better product.” He said current customer expectations are “far behind what the commercial airline market has enjoyed for many years in terms of quality of service.”
Montreal-based CAE may be new to business aviation, but the company has a long history in flight simulation and training in the commercial and military markets. Founded in 1947 with 18 employees, CAE now has a presence in 13 countries, employs 6,000 people and generates annual revenues in excess of $650 million. CAE is the world’s leading supplier of civil flight simulators and visual systems, having sold more than 500 simulators to some 100 airlines, aircraft manufacturers and civil and military training centers.
Focusing on Core Businesses
In 1999 Derek Burney took over as president and CEO of a company with 23 different businesses. He quickly set out to divest CAE of its non-core businesses to focus on civil simulation and training; military simulation and training; a subgroup of visual systems supporting both civil and military; and marine controls.
Last year the company enjoyed a 51-percent increase in earnings per share from continuing operations. Burney attributes corporate-wide growth to reinforcing the company’s flight-training component, investing in core technology, enhancing its visual system and initiating marine training. After evaluating the company’s market presence it was determined to expand into business aviation training.
“One of the first things we did to facilitate our expansion into business aviation was to buy SimuFlite last December,” Leontidis said. Addressing why SimuFlite was always second to FlightSafety, Leontidis said, “One of the biggest problems SimuFlite had was the cost of equipment. The business aircraft simulator market was very much a one-supplier market,” he said. “FlightSafety would build simulators for itself at cost but sell them to others at a profit. Obviously that’s a good model but we want to offer another choice.”
SimuFlite: The Other White Meat
Leontidis also underscored the importance of FlightSafety’s established relationship with the OEMs. “That’s an area where we have to focus our efforts,” he said. “But it is important to remember that there are 15,000 airplanes out there today. Bombardier, Cessna and the other OEMs deliver 400 of them every year. FlightSafety currently owns that market, but there are another 3,000 airplanes that get bought and sold every year throughout the world. Every one of those sales is a training event, and they’re all up for grabs. We have to provide incentives to those sellers to work with us to provide training with each sale.”
The acquisition of SimuFlite added more than 370 employees, 24 simulators and business aviation flight and maintenance training to CAE’s catalog. The division will put five more full flight simulators into operation by year-end. SimuFlite offers 100 initial and recurrent fixed- and rotary-wing training programs and has more than 3,000 customers.
While SimuFlite may be the second-largest provider of business aviation simulator training, its Dallas-Fort Worth facility will soon clearly be the largest of its kind. A new 70,000-sq-ft wing will bring the center to 411,000 sq ft and will add six simulator bays for a total of 36 simulators. By year-end, CAE will have a worldwide fleet of more than 75 flight simulators and will continue to push forward with expansion. CAE early next year will open a 12-bay training center in Dubai that will offer Airbus A330/340 and A319/320 and Boeing 737 simulators. That facility will also house Gulfstream IV and GV simulators.
Despite the growth in the training segment, simulator production still remains an integral part of CAE’s strategic planning, and it continues to actively conduct research and development. Its newest iteration of flight simulation is the Sim XXI. The first model, a CRJ700 simulator, went into operation in January. Some of the key innovations include a modular architecture based on Pentium technology, electrical control loading–which eliminates the need for hydraulic power–and a standard instructor/operator system designed with built-in customization options. The XXI is lighter than its predecessors thanks to composite materials, and the simplified design requires fewer parts, making it easier to assemble, test, integrate, evaluate, deliver and maintain.
CAE has also developed a new family of visual systems called Tropos. It is the first image generator based on commercial, off-the-shelf graphic processors. Tropos, which makes realistic runway lighting with occlusion possible, has 60 percent more polygons per channel, 20 percent more pixels and twice the texture memory of previous visual systems. Users see a sharper, more realistic image, including advanced weather effects. The unit is also significantly smaller and easier to maintain.
In a continuing effort to contain training costs while increasing customer benefit, CAE has developed a line of interactive products and services based on the same high-fidelity simulation software used in CAE’s flight simulators. CAE Simfinity was created by Interactive Learning Services, one of CAE’s new business initiatives. Simfinity has made significant inroads in transforming the future of pilot and maintenance technician training.
American Airlines and CAE are exploring Simfinity for use as a checklist procedure trainer to offload Boeing 737 flight simulator time. Another Simfinity application goes into service this year as an online troubleshooting tool for Boeing customer-support engineers and field-service reps. Southwest Airlines and American Airlines are also looking to incorporate a Simfinity product into their respective training programs.