Strategy in action

Civil aviation training has a high degree of recurring business driven by a highly regulated environment. National and international aviation regulatory authorities, such as the International Civil Aviation Organization (ICAO), European Aviation Safety Agency (EASA), and Federal Aviation Administration (FAA), set these mandatory and recurring training requirements.

We expect the regulatory trend for more immersive and more comprehensive training to continue to ensure the safety and well-being of airline passengers and crew. A key example is emerging Upset Prevention and Recovery Training (UPRT) regulations to address Loss of Control In Flight (LOC-I), the leading cause of aircraft fatalities. We have brought a number of solutions to market to support our customers’ readiness as these regulations become effective.

We are the world’s leading provider of training equipment and cadet-to-captain pilot training. Through our broad global network of more than 50 training centres in over 30 countries, we serve all sectors of civil aviation including airlines and other commercial, business and helicopter aviation operators. This network, combined with our deep customer relationships, creates a powerful competitive moat.

The civil aviation training opportunity is growing and sizeable. While we want to maintain our leading market share in simulator sales, our focus is on increasing our market share in training delivery. This approximately $3 billion market is six times larger than the simulator market. We currently have 25% of the training market, leaving 75% of it untapped.

In commercial aviation, air passenger traffic grew by 6.5% last year and the aerospace industry’s widely held expectation is that long-term average growth for air travel will continue at 4.2% annually over the next decade. This trend points to a continued and increasing need from our customers for training solutions.

We operate one of the globe’s largest networks of training centres, equipped with over 250 full-flight simulators around the world. We continue to focus our efforts on optimizing our performance on these assets to improve investor returns.

Continually striving to design and deliver the best products and training gives rise to a steady stream of innovations. Our innovative, new CAE 7000XR full-flight simulator is an excellent example. In fiscal 2016, a multi-disciplinary team, including suppliers, succeeded in reducing the simulator’s weight, part count, cabling and energy requirements.