GRAHAM WARWICK / WASHINGTON DC
Manufacturer to continue operation alone after conflicts over package sales
Boeing and FlightSafety Inter-national (FSI) have agreed to dissolve their five-year-old training joint venture. The aircraft manufacturer has agreed to acquire all of FSI's interests in FlightSafety Boeing Training International (FSBTI). Terms have not been disclosed, but sources say FSI's stake in the 50:50 joint venture was valued at $300-325 million. The split was first hinted at two months ago (Flight International, 30 July-5 August).
The operation will be renamed Boeing Training International, reporting to the Commercial Aviation Services arm of Boeing Commercial Airplanes. "With this transaction, we can continue to support our customers and have broader flexibility in offering training alone or as part of a larger solutions package," says executive vice-president Commercial Aviation Services Mike Bair.
Boeing and FSI parted company after disagreeing on how the business should be operated. FlightSafety wanted to run FSBTI along the lines of its highly profitable business and regional aircraft training operation, while Boeing was increasingly interested in packaging training with the aircraft in a bid to boost airliner sales. Airbus has frequently packaged simulators and training with aircraft sales.
FSBTI was formed in 1997 by bringing together Boeing's customer training operation with FlightSafety's fleet of simulators for airliners with 100 or more seats. New centres were established and more simulators purchased, some from FSI. FSBTI has 800 employees and 70 full-flight simulators in 21 locations worldwide, some shared with FSI's business and regional training operation.
Ahead of the final agreement, an FSI official described the deal as a restructuring rather than a buyout, with the financial settlement stretching over several years. FlightSafety president and chief executive Al Ueltschi says the companies "will continue to work together" and FSI "will continue to offer flight simulators, training devices, facilities, support services and personnel". Boeing will retain the current management team, led by president Pat Gaines.
CAE has formed a training venture with Airbus, but there is no equity involved in the two companies' 10-year renewable agreement and CAE will continue to supply simulators for other manufacturers' aircraft. CAE has also hired former FSBTI president Gary Scott to run its commercial aviation business.
Source: Flight International
