But interest from airlines in outsourcing is on the increase as flexibility becomes key

CAE has reduced estimates of commercial flight simulator sales over the next two years, but expects to offset the decline with production for its own training centres.

The Montreal-based firm predicts sales of around 25 simulators by the end of financial year (FY) 2002, down on an initial forecast of 29-30, and below its FY2001 total of 34. Sales in FY2003 are expected to be lower still. CAE sold 17 full-flight simulators in the six months to 30 September, with an 85% market share.

But "overtures" from airlines interested in outsourcing training have increased since 11 September, says chief executive Derek Burney. Discussions "may bear fruit before the end of the year", he adds.

Flexibility to sell, lease or operate simulators is increasingly important to CAE, as illustrated by a C$100 million ($70 million) order from Algeria's Khalifa Airways for four simulators, after a C$70 million sale to Emirates of three machines to equip a jointly operated training centre in Dubai.

Fast-expanding Khalifa has ordered Airbus A320, A330/A340, Boeing 777 and ATR 72 simulators for delivery in 2003 and 2004.

The Emirates' deal adds airline-owned A330/A340 and Gulfstream IV and V simulators to the CAE-owned A320 and Boeing 737NG and 777 machines to be installed in the Dubai centre when it opens early in 2003.

CAE has doubled training revenue forecasts for next year to C$200 million. Its first centre opened in Saø Paulo in April, and sites in Madrid and Toronto will open in December.

A Denver centre will open in June, with Air Wisconsin as anchor-tenant. Frontier Airlines has signed a five-year deal for A320 training in Denver.

The Toronto centre's anchor-tenant, Canada 3000, ceased operating earlier this month, but CAE has signed up Air Transat for two years of A320 training there and inked a 10-year agreement with Air Canada Regional, under which a Bombardier Dash 8-100/300 simulator will be located in Toronto and another in western Canada.

CAE acquired four existing centres from Schreiner Aviation Training in August, and will add Boeing 737NG and Fairchild Dornier 328JET simulators at the Dallas, Texas, site next year.

Burney says CAE will make "12 to 15" simulators for its own use this financial year.

Source: Flight International