Download - FACE THE FACTS WITH MARC PARENT

P E O P L E

July 19 2006 FLIGHT DAILY NEWS48

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Q: In 2005, CAE embarked ona six-year, C$650 million ($560million) R&D programme.What can we expect to see as aresult of this?

A: Simulation technology leader-ship has been and will continue tobe one of CAE’s fundamentalcompetitive discriminators. Our‘Project Phoenix’ programme is thesingle largest integrated R&D effortin CAE’s history. The simple goal isto ensure that CAE maintains itsworld-wide leadership in simula-tion. We will be continually devel-oping new simulation technologies,such as solutions for the militarythat significantly enhance the useof simulation for mission rehearsal.

We’ll also develop technologiesfor adjacent and emerging markets,such as homeland defence. Finally,we are revolutionising the designprocess for simulators to shortenthe time to market so we haveR&D initiatives aimed at coresimulation technologies, such asvisuals and motion systems.

Q: How is CAE faring in themarket for Boeing 787 andAirbus A380 simulators?

A: CAE has a long history ofbuilding prototype simulators fornew aircraft. For example, we’recurrently designing the first-eversimulator for China’s new ARJ21regional aircraft.

However, building the prototypedoesn’t necessarily give you atremendous advantage every timeyou compete, and not building theprototype doesn’t necessarily putyou at a serious disadvantage. Airbusselected CAE to design the firstsimulators for the A380 and we’reunder contract to provide five A380simulators: two each for Airbus andEmirates and one for Qantas.

We did not win the initial

MARC PARENTFACE THE FACTS WITH...

CAE, a global leader in simulators and training, recentlycompleted an 18-month restructuring. Marc Parent, thecompany’s newly appointed group president responsiblefor Simulation Products as well as Military Training andServices, talks to Colin Baker about the company’s key

initiatives and plans for the future.

Boeing 787 prototype, but wehave launched development inter-nally and have a close workingrelationship with Boeing. Anumber of long-time CAEcustomers have committed to the787 so we’re actively pursuing 787simulator bids as well as trainingservice opportunities.

Q: In recent years, CAE hasmade rapid inroads in thecivil aviation training sectorthrough organic growth,acquisitions and jointventures. Is that going tocontinue at the same pace?What proportion of your busi-ness is made up of training?

A: Fortunately, we have closecustomer relationships with manyairlines and are listening closely totheir training requirements.

We’ve established CustomerAdvisory Boards so we’re meetingregularly with key customers andprospects. CAE is relocating 28simulators within our globalnetwork of more than 20 trainingcentres, as well as adding capacityto serve market demand.

technology will play a key role inpreparing military forces for thisnetwork-centric environment.

Q: What will be the mainchanges in your businesssector over the next 5-10years and how are the needsof your customer changing?

A: Our civil airline customers stillface intense competitive pressuresand will continue to focus on costs.At the same time, safety is the toppriority and CAE is well-placed tooffer simulation equipment as wellas safety training services.

We see our customers challengedto recruit and train pilots so weexpect our pilot provisioning serv-ices to expand. New trainingapproaches such as the Multi-CrewPiloting License (MPL) will alsobring changes. On the militaryside, forces now almost alwaysoperate in joint- and multinationalcoalitions and the requirement isto ‘train like you fight.’ So we’ll seemore emphasis placed on jointtraining and mission rehearsal, andsimulation will be at the heart ofdelivering these capabilities.

Q: CAE recently underwent amanagement reshuffle. Whatdoes that mean for you, thecompany, and your customers?

A: Our restructuring initiatives,which are now complete, weredesigned to make CAE morecompetitive, increase efficiencies,and allow us to better respond tomarket and customer requirements.

We’ve consolidated manufac-turing, engineering, programmemanagement and global procure-ment to maximise synergiesbetween our civil and militarybusinesses. For example, we’vebeen able to reduce cycle times onsimulator builds.

I now have responsibility forthe design and development of allsimulation products for CAE, aswell as our military business whilemy colleague Jeff Roberts headsCAE’s civil and business aviationtraining initiatives. CAE hasturned the corner and is nowsetting a chart for growth.

“We’re receptive to meeting marketdemand in a variety of ways, including

partnerships and joint ventures.”Marc Parent

We’re receptive to meeting marketdemand in a variety of ways,including partnerships and jointventures. Right now approximately47% of CAE’s C$1.1 billion ($971million) in annual revenue is gener-ated through training services in bothcommercial and military markets.

Q: The Chinese, Indian, andMiddle East markets arebecoming increasinglyimportant for aviation ingeneral. What is CAE doingto respond to this and growin these markets?

A: CAE already has a strong presenceand proven track record in China,India, and the Middle East. We’reunique in our ability to provideturnkey training solutions to airlinesin these regions, from the world’smost advanced simulators andtraining devices to flight trainingand pilot provisioning services.

In China, we have a jointventure training centre in Zhuhaiwith China Southern that has beenvery successful, and we’re currentlyexpanding capacity with a new six-bay facility. In the Middle East, weteamed with Emirates to jointlyoperate Emirates-CAE FlightTraining (ECFT) in Dubai to servecommercial and business aviationcustomers. In India, over two-thirds of the installed base of flightsimulators were built by CAE and anumber of Indian airlines currentlytrain at ECFT.

Q: Which emerging militaryprogrammes around theworld have you got your eyeon? To what extent are youinvolved in the UAV market,and what are the main chal-lenges in this sector?

A: The NH90 helicopter has beensuccessful and so far onlyGermany has taken a decision ontraining. CAE is part of a consor-tium that will build NH90 simula-tors and then provide the trainingservices for Germany. We antici-pate other nations will decide ontheir NH90 training solutions overthe next of couple years.

In the US, we are watching theUS Air Force’s combat search andrescue helicopter procurementand the combined Air Force/Armyjoint cargo aircraft programmevery closely. We’re also pleased tosee Canada making a significantinvestment in new militaryaircraft and we anticipate trainingopportunities to result.

CAE has run the US Air Force’sPredator UAV training programmesince 1998 so we have a range ofexperience delivering classroom,simulator, and actual flightinstruction for UAVs. We’re alsopartnering with UAV manufac-turers such as Israel AircraftIndustries to embed simulationcapabilities. The fact is thatunmanned systems will play anincreasingly important role onfuture battlefields and simulation

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Colin Baker

Diversified UK-basedsupplier Cobham held ameeting for 80 of its topexecutives the day beforeFarnborough opened – thefirst time the company hasheld such an event.

Chief executive AllanCook is using the airshowto develop his strategy ofmaking the whole biggerthan the parts and gettingdifferent sections of thecompany to work togethermore effectively

“The meeting was not justabout where we are today,”says Cook. “I explained tothem what I saw as ourfuture. I think we have anexciting future. We have gotthe people, we’ve got theproducts and we have gotthe services. We are aimingto get the best of Cobhamright across each division,”

he says, pointing to thecompany’s motto of “Sixdivisions - One standard.”

Since he took the helm in2001, Cook has moved to aflatter structure, movingthe company from 80 sepa-rate units to five tech-nology divisions and oneservice division. Thesecover air refuelling andauxiliary mission equip-ment, antennae, avionicsand surveillance, defenceelectronic systems, lifesupport and flight opera-tions and services.

FocusedCook makes it clear that

the company will increas-ingly be focused on defenceand the US market. Lookingat the defence sector, Cookcomments: “During thepast year, there have beenthree important announce-ments,” pointing to theincrease in the US defence

budget, the quadrennialdefence review and the UKdefence industrial strategy.

Around half of allrevenue now comes fromthe US, compared with 30%when Cook took over in2001. “If you are involvedin the military side of thebusiness, that is where thegrowth is. France is flat,Italy is flat, in Germanydefence spend is falling.The two markets that aregrowing are the US andUK.” In the longer term, healso sees growth comingfrom India, Pakistan andSouth Korea.

UAVs will also play a keyrole in the future of Cobham,Cook says, noting that thefirm is working on a numberof autonomous air refuellingprojects in this field.

Cook argues thatCobham is well-positionedto take advantage of themove towards network-

centric operations, as setout in the quadrennialdefence review. “Three partsof our business are involvedin network-centric opera-tions – antennae, avionicsand defence electronicsystems. They will have amajor part to play.”

He also points to this as agood example of the coop-eration across different divi-sions that he is promoting,and makes the same argu-ment in regard to theA$1billion ($750 million)deal to supply BombardierDash-8s to the Australiancoastwatch programme formaritime surveillance. The12-year contract was won by Cobham-owned

Surveillance Australia, butwill incorporate compo-nents and communicationequipment from otherCobham divisions.

Cook is also proud of theway different Cobham divi-sions collaborated on theVirgin Atlantic Globalflyerthat set a record for thelongest flight in historyearlier this year – whichfinished a few miles fromCobham’s Dorset HQ.

In the meantime, Cookmakes it clear that moredisposals and acquisitionscan be expected. The groupdisposed of countermeasuresbusiness Precision Antennasand telecom equipmentprovider Atlas Composites

over the past year, and haspurchased Aerodata FlightInspection and theoutstanding minorityinterest in Flight PrecisionLimited. “We are constantlyevaluating our portfolio,”says Cook.

Commercial airspace hasfallen to below 10% ofrevenue. “It is clear we seemilitary and defence as beinga more important part of thebusiness,” he says. Cook iscommitted to increasingR&D spend, aiming to bringit up from 5% of revenues to7% in the next two-to-threeyears. In absolute terms, thiswill be an increase of 25% onthe current level of around£50 million per year.

Cook brings Cobhamexecs together for strategic summit

Allan Cook: focusing Cobham on defence and the US market.


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A lesser man than AlainBellemare might now wishhe’d never uttered the words“eight-hour engine”. Whenhe first committed P&WC toturning out one PW600 ashift on the new moving lineat Montreal Longeueil, littlecould he have known thesubject would fixate inter-viewers for years to come.

And overshadow a stringof developments by one ofthe world’s most versatileengine-makers.

Fortunately, the bounceand good humour thathelped propel him to the topof the corporate heap by hisearly 40s are still evident ashe fields yet another ques-tion about the powerplantfamily for the leading VeryLight Jets (VLJ).

“The new line is up andrunning, and we’re deliv-ering engines,” he says. “Westill need to do some fine-tuning because we’re at theearly stages of productionramp-up. But as soon as thevolume is up, we’ll be therewith the eight-hour engine.”

Eight isn’t the only magicnumber on Bellemare’smind. The compact,constantly active PW600line is actually the last linkin a chain of suppliers thatthe company has beeninstilling with a new way ofworking. The P&WC presi-dent values his vendors, buthe’s also glad there aren’tmany of them.

“The main lesson we’velearned from early PW600production is that having amuch lower number of keypartners than usual makes abig difference,” he says. “It’smuch easier to work with alimited number of integra-tors. We can communicatewith them better, ensuringthey do the right things toramp up their capacity, putthe right quality processes in

place, and give their peoplethe right training.”

Bellemare makes no bonesabout his conviction that thePW600 family – the 610 forthe Eclipse 500, the 615 forthe Cessna CitationMustang, the 617 for theEmbraer Phenom 100 – is anenabler without which theVLJs and the much trum-peted air-taxi market wouldnot exist. “The PW600 is agame-changer in its tech-nology, sourcing, assemblyand, above all, its potentialto enable a whole newmarket.”

When it comes to VLJs ingeneral and air taxis inparticular, Bellemare is abeliever. “Look at the orderbook,” he insists. “It’s clearthat the general-aviationmarket is placing firmorders in significant quanti-ties. The market is defi-nitely developing in linewith the forecasts and withour expectations.”

ChallengingThe men from Montreal

have long voiced theirsupport for the air-taxiconcept and are followingthrough not just with thePW600 but also in otherpractical ways. “We’vealways said making air-taxiswork was going to be morechallenging than the owner-operator VLJ market,” saysBellemare. “So we’reworking closely with Pogoand DayJet in the USA andJetBird in Europe – theysought our input into theirbusiness models and we arepassing on the operatingand support lessons we havelearned over the years.”

P&WC marketing vice-president Keyvan Fard spellsout the specifics. “Weemphasised to them theneed to focus on the mainpart of their business, which

is carrying passengers,” hesays. “We can help them dothat by managing theengines. Maintenance, relia-bility, parts supply, spareengine supply - we can takeon all that.”

Fard also believes thatP&WC’s intimate knowledgeof demanding regional andbusiness-jet operations canhelp to give the air-taxicompanies a smooth climb-out from Day 1.

“Our operational insightsshould allow them to avoidthe day-to-day issues andensure that they have a reli-able product,” he says. “It’svital that they be efficientfrom the start, to win theconfidence of passengers andkeep them coming back.”

Finally, the P&WCmanagement team is encour-aged by the sheer variety ofair-taxi business and oper-ating models now in devel-opment.

“DayJet’s is closest to thetaxi concept, JetBird islooking at branded point-to-point charters, Pogo hasyet another model,” saysFard.

“The three operators arealso addressing threedifferent regional customerbases – in the US north-eastand south-east, and inEurope. We don’t know yetwhich one will be mostsuccessful. But we do knowthere’s a need for point-to-point services and they aregoing to happen.”

While the PW600 familygrabs the limelight, P&WC isgetting on in its far-sightedway with an array of otherprogrammes that range fromstill more derivatives of theevergreen PT6A turboprop topowerplant concepts for anew military heavy-lift heli-copter and even the much-discussed replacements forthe Boeing 737 and Airbus

A320 air transport narrow-bodies.

Executive turbopropmanufacturer EADS Socata isboldly promoting its TBM850 as a more economicalalternative to the VLJs,declaring that the newaircraft has for all practicalpurposes abolished the speeddifferential that gives thelittle jets their key advantage.The key to the improvedperformance is the PT6A-66D. Developed at therequest of EADS Socata, thisvariant produces a flat-rated850shp (630kW), some150shp more than the -64powering the TBM 700.Features include single-crystal compressor blades,allowing higher turbinetemperatures, and a newfirst-stage compressor designand gearbox.

Comments Bellemare:“Some people say that all wehave done is cannibalise ourown market in the VLJs, but Ithink there’s plenty of roomfor different kinds of aircraftaddressing different customerniches and markets.”

Other new PT6 activitiesunder way include the PT6A-66B for the Piaggio Avanti II,plus a number of develop-ments still to be announced.“In the coming years you’llprobably see three or fournew PT6 programmes,”Bellemare predicts. “Two aresimilar in scale to the -66D,the others larger and aimedat a different market.”

OutlookWhile the PT6 flies on,

the outlook has untilrecently looked bleak for thebigger PW127 and PW150and the air transport turbo-props that they power.

“We’ve always said therewould be a niche for turbo-props because they providefuel economy the jets can’tmatch,” says Bellemare.“Now look at what’shappening. The manufac-turers are talking aboutbuilding 50-100 aircraft ayear.”

P&WC is convinced thatthe turboprop resurgence isno flash in the pan. “Theimprovement in this market

will be sustained because theprice of fuel is high and isn’tgoing to fall significantly inthe medium term,” saysBellemare.

Not that P&WC has lostinterest in powering aregional jet – far from it.Although the company hasyet to secure a launch plat-form for its PW800 10,000-20,000lb-thrust (45-90kN)turbofan, Bellemare remainsconvinced of the eventualneed for an engine in thisrange. The only uncertainty,he believes, has to do withthe sector that will need itfirst.

“At this point we’re justcontinuing to build onPW800 and AdvancedTechnology Fan Integrator(ATFI) demonstration work.”

The resulting engine couldpower the next generation ofregional jets, thoughBellemare has his caveats.“The market for 50-seater RJsis almost gone, and while the70-seater market is veryactive there’s no new plat-form on the horizon,” hepoints out. “So the potentialapplications are migratingtowards the upper end of theRJ market, aircraft with 90seats and beyond.

“There will eventually bea need for a new generationof single-aisle airlinerspowered by an engine ratedat around 30,000lb,” he says.“Pratt as a group has thatsmack in the middle of itsobjectives. We’re spending alot of time and money ontechnology demonstration toensure we’re ready for acommercial launch when thetime comes.”

Not content with providing the keystone for abrand-new mode of air transport, Pratt &Whitney Canada president Alain Bellemare tellsBrendan Gallagher he’s also got his eye on theA320/737 replacement market.

JUST RIGHTVERY LIGHT

Alain Bellemare

“We still need to do some fine-tuning because we’re at theearly stages of production

ramp-up. But as soon as thevolume is up, we’ll be therewith the eight-hour engine.”
