CAE Courts Asia Simulator Buyers as U.S. Orders Stall

CAE Inc., the world's largest maker of flight simulators, is working to add customers in Asia and win defense contracts to wean itself from dependence on U.S. airlines, Chief Executive Officer Robert Brown said.
China and other Asian countries now generate 11 percent of revenue, up from 7 percent in 2005. Europe accounts for 37 percent of revenue, up from 34 percent two years ago. Until two orders last week, CAE had won only one order from a U.S. carrier in the six years since the Sept. 11 attacks, Brown said.
``We were much more reliant on North America and on simulator sales to U.S. airlines,'' Brown said in a Dec. 20 interview from CAE's Montreal headquarters. Now, ``there's demand like we've not had before'' from China and India.
As Brown wooed buyers including Jet Airways India Ltd. and Air China Ltd., U.S. revenue fell to 32 percent in fiscal 2007 from 42 percent two years earlier.
CAE has a flight-training center in Zhuhai, China, to serve airlines in the world's second-biggest aviation market, and another in Dubai, in the United Arab Emirates, that is a training base for Indian carriers, Brown said.
CAE's simulator orders in fiscal 2007 reflect the push by Brown, 62, to add business outside the U.S. since becoming CEO in 2004.
Of 34 orders, eight came from Indian and Chinese customers including Jet Airways and Air China, compared with one from the U.S. A simulator for a Boeing Co. or Airbus SAS jet with full options typically costs about $16 million.
24/12/07 Hugo Miller/Bloomberg

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Categories: Foreign Dec 2007