Jefferies: With Simcom in Fold, CAE Rapidly Expanding

CAE has been growing rapidly in market share on the strength of agreements such as with Flexjet as well as through its acquisition of a majority share of Orlando, Florida-based flight trainer Simcom, according to analyst Jefferies. 

CAE announced in November that it was increasing its ownership stake in Simcom, while Flexjet retained a minority stake. As part of the transaction, CAE and Simcom extended their respective business aviation training services agreement with Flexjet and its affiliates, pushing out the remaining exclusivity period collectively to 15 years.

Jefferies, which recently met with CAE, Simcom, and Flexjet officials in Orlando, Florida, in light of the transaction, noted that the majority stake in Simcom—which had been the third largest business aviation provider—gave CAE a 40% market share.

Simcom has been ramping up through its new facility at Lake Nona in Florida, which opened in July 2023.  The location has six operational full-flight simulators, another one being assembled onsite, and six flight training devices (FTDs). The six full-flight simulators are used for training on the Gulfstream G650, Bombardier Challenger 300/350, Phenom 300, and the Praetor 600, while the FTDs support Daher TBM and Pilatus PC-12 training, among others. According to Jefferies, the location has space for six more full-flight simulators (CAE is currently building three more) and can be scaled for more.

Adding Simcom is part of a concerted effort by CAE to grow its business aviation global footprint, which now encompasses 15 facilities with at least 110 simulators. Throughout its network, CAE has a total of 362 full-flight simulators.

Also driving its growth is attempting to grow its customer base organically, in addition to taking care of its legacy customers, Jefferies noted, estimating that the exclusive agreement with Flexjet alone encompasses hundreds of pilots for training, based on 45 to 50 new aircraft per year with five pilots each.