Makers of simulators for the civilian market have potent new products to address the ever-expanding desire to transfer training to a safer, low-cost yet ultra-realistic virtual environment. What is missing, at least for now, are the customers.
The quandary is in direct response to the economic challenges of the international airline market, which is not expected to return to profitability until later this year and next year from the downturn that began in the latter half of 2008.
"While airlines continued to take aircraft, they were replacement aircraft for less fuel-efficient older models," says Jeff Roberts, group president of civil simulation products, training and services for CAE, the market share leader for airline simulators and training worldwide and second largest provider of business aviation simulators and training.
"Capacity and utilisation went down, hiring stopped, movement from first officer to captain positions slowed as did training between aircraft types," says Roberts, adding: "All of those things have an effect on training demand."
Rockwell Collins, historically a component provider for civil simulators but more recently a full-scale competitor with the recent US and European certification of its first full-flight simulator, puts a quantitative measure on the crisis.
"The simulator delivery rate is the lowest in about eight years," says Ken Schreder, vice-president and general manager of simulation and training at Rockwell Collins. "It's an interesting environment because airline deliveries remain constant."
Exacerbating the problem for the US market was a congressionally mandated increase in pilot retirement age. "In 2007, the US unions increased the forced retirement age for pilot from 60 to 65," says Schreder. "When you couple that to world economic environment in 2008 and 2009, attrition rates were at a low point, and there wasn't a lot of pilot turnover.
"If they're not retiring and staying stable in positions, there isn't a lot of flow in pilot community, and flow puts demand on training. A new pilot has to go through initial pilot training. When a pilot upgrades to larger aircraft, they have to go through some conversion training. When a pilot goes from first officer to captain, there's some additional update training. If we aren't seeing that flow, it starts to put a damper on the simulation and training demand.
Both Schreder and Roberts are seeing positive trends, enough to cause them to be "cautiously optimistic".
"Between the retirement age change, the attrition, the opportunities from additional aircraft coming to fleets, we do believe the marketplace is going to see a recovery," says Schreder. "We're starting to see inquiries pick up on the past two to three months and expect it to increase."
CAE's Roberts says: "On the commercial aviation side, the market has rebounded a bit and is becoming increasingly positive. On average, the freight numbers are up and passengers are up. We are cautiously optimistic that we're in the upswing, although it's fragile."
Tempering the outlook is what Roberts describes as the "particularly troubling" economic issues in Europe, highlighted by Greece's budget deficit crisis earlier this year. Counterbalancing European issues however is a "very strong" economic climate in Asia, the Middle East and South America. "It will take this year and part of next year for airlines to return to profitability," says Roberts.
"That will portend a better market for products business," he adds.
When the market does rebound, the simulator makers promise to be in an optimal position to provide services that will become increasingly complex in the next generation air transport system, thanks in part to technology injection. Roberts says CAE continues to invest 10% of its overall revenue in research and development, largely aimed at "further realism, fidelity and operational efficiencies that our operators will benefit from".
He adds: "I think what is indisputable is the growth that the aerospace industry is going to go through is material and significant. The complexity of managing and flying and operating aircraft in increasingly congested airspace offers potential challenges for the industry. We also have to be cognisant that the demographics of the pilots is changing and we have to change our methodologies to capitalize on that."
The post 2010 mantra applies equally to other established high-end civilian simulator manufacturers like FlightSafety International and Mechtronix, as well as newcomers such as Rockwell Collins and Australia's SimJet.
"As we continue to talk with customers, what we consistently hear from them is that they want a heightened focus on life cycle costs leading to lowest ownership costs, not only in terms of the cost of acquisition, but the cost to operate," says Schreder. For Rockwell Collins, that has meant focusing on isolating the components that could be made common from one application to the next, not only in the commercial airline market, but for the military and regional jet sectors as well, and making the system as a whole more reliable and lower cost.
"When you walk into our simulator, it physically looks the same [as the aircraft], but as you fly it and maintain it, you see what makes it unique," says Schreder.