NEWTOWN, Conn. -- As the need for trained pilots increases, the demand for CAE's products and services continues to grow. While the order boom in new aircraft has abated, the production boom will be evident for some time to come. As these aircraft enter airline fleets, they will require pilots qualified on the new aircraft. This, in turn, will provide long-term stability for CAE.
To meet this growing demand for pilots, CAE has expanded its operations with acquisitions, joint ventures, and training centers around the world. Over the past few years, the company has added facilities in Brunei, Barcelona, Seoul, and Mexico, and has acquired the Oxford Aviation Academy.
More recently, the company acquired Alpha-Omega Change Engineering (AOCE) in the USA. The acquisition is expected to enhance CAE's core capabilities as a training systems integrator especially on military aircraft, while at the same time expanding the company's presence in US defense markets. The purchase immediately made CAE a prime contractor on a range of U.S. programs including: Maintenance and Aircrew Training at Kirtland/Davis-Monthan/Joint Base Andrews/Moody (KDAM) in support of the Air Force Special Operations Command Aircrew Training and Rehearsal Support (ATARS) program; U.S. Army Space & Missile Defense Command contract to provide engineering and operational support services; and U.S. Air Force contract aircrew training and courseware development for F-15, F-16, and F-22 aircrews.
Overall, these expansion efforts have strengthened CAE's leadership and global reach in civil and military aviation training by increasing the company's training center footprint and growing its ab initio flight training network.
With governments looking to keep spending in check, CAE has been shifting to provide integrated training systems for these clients. Military operations continue to simmer around the world, and the demand for military training and simulation is matching pace. Thus, the need for virtual and simulation-based training will likely grow. Further, the ability to network simulators for joint training will only increase the attractiveness of CAE's systems to military officials. Finally, increased fuel costs, vehicle wear and tear, and environmental impacts will be yet more factors in the drive to increase the use of simulation products for training.
As it looks ahead, CAE is focusing on its core markets for the most part. The company had expanded into data mining simulation, but has since sold the operation after five years in the market. The company does have a minority stake in the healthcare market, and it is looking to grow its healthcare unit as a way to better diversify CAE's portfolio away from aerospace.
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