Canadian pilot training company CAE’s civil aerospace business turned a C$48 million ($38 million) operating profit in the third quarter of the company’s 2021 fiscal year despite the pandemic driving revenue down by more than half.
Despite the ongoing downturn, CAE chief executive Marc Parent remains bullish about the company’s long-term prospects, predicting CAE will “emerge from this period with even greater strength”.
The civil division’s operating profit in the three-month period ending in December 2020 is down 61% year-on-year. CAE’s revenue declined by 26% year-on-year in the period to C$412 million.
The company has insisted that demand for pilots – and, hence, pilot training – will return as the industry recovers from the pandemic.
But the pace of CAE’s recovery remains uncertain, being dependent upon how quickly the airline sector recovers, the company notes.
CAE’s civil aviation training centers operated at only 50% capacity in last three months of 2020 and in the first month of 2021. Demand for business-aircraft pilot training has been stronger than that for commercial pilots.
“Covid-19 continued to negatively affect Civil training revenues during the quarter, with a significant decrease in training services demand as a result of the reduction in airlines’ global operations, disruption to the global air transportation environment and diminished air passenger travel,” CAE’s quarterly securities filing says. “Certain training locations have recently had to curtail operating activities temporarily as local authorities implement measures to contain the spread of Covid-19.”
CAE landed new civil aviation contracts worth C$329 million during the last three months of 2020. Those include training deals with Germany’s Bundeswehr, Mexican cargo airline MasAir and passenger airlines TUI Airways, Iberia and LOT Polish Airlines. It also signed a “housing” agreement with Virgin Atlantic Airways.
CAE acquired three companies in recent months. It bought Dutch training firm Flight Simulation Company for C$105 million in November 2020, Auckland flight-crew management company Merlot Aero for C$29.5 million in December and the Canadian business of Tru Simulation and Training for C$40 million in January.