Airlines and training centres seeking to acquire their own full-flight simulator have at least 10 Level D manufacturers to choose from. Rick Adams looks at the players and the process.
“It’s a more-for-less market,” admits Dean Fisher, CAE’s global leader for simulation technology sales.
CAE has dominated openly competitive sales of airline full flight simulators (FFS) for the past decade or more, almost at monopolistic levels with a market share of 70-80% of the 40 or so FFSs sold worldwide annually. The Montreal manufacturer is not expected to yield that position willingly, but now faces intensifying price pressure from at least four other vendors with deep pockets, as well as a handful of smaller companies capable of producing Level D FFSs.
In the past couple of years, L-3 Communications and Lockheed Martin have bought into the civil simulator market via acquisition, Rockwell Collins has suddenly gotten aggressive with a China-focused strategy after being dormant for five years, and FlightSafety International (FSI) is also signaling a desire for more commercial aircraft sim manufacturing business.
In some competitions, there may also be proposals offered by Mechtronix, Opinicus, Frasca, Indra, or even new sim-in-a-van players such as Venyo.
If you represent a start-up airline seeking to purchase your first FFS, or an independent training centre, or even a major airline who is a long-time customer of traditional vendors, it’s a buyer’s market unlike any time in recent memory.
The competition is less about technology, which has almost become commoditised across the board: electric motion platforms, high-fidelity image generators, liquid crystal on silicon (LCoS) display projectors, and a data package from the aircraft manufacturer which may absorb half or more of the initial procurement price.
“Fifteen years ago, the focus was on technical merits. Today, decisions are made almost exclusively on price,” says John Van Maren, FSI director of programmes and customer support. CAE’s Fisher concurs. “There are new players in the process. The tech people are always a key function. But we’re seeing more and more financial leadership; that brings into the fold many other questions about what is important versus what is nice to have.”
Sometimes the discussions lead to non-traditional financial arrangements. CAE’s strategy has emphasised joint ventures with major airlines in each region – for example, AirAsia and Emirates – coupled with long-term agreements to train the airline’s pilots. That provides a baseline usage for the simulator to justify the purchase price; excess time can be sold to other airlines and the proceeds shared between the JV partners. In other situations, the simulator manufacturer may agree to locate a simulator with an airline in return for a 5-, 10- or even 20-year services agreement, a concept sometimes referred to as “power by the hour” (the approach of Belgian-based Venyo and occasionally used by some of the larger vendors). In a few cases, a third-party organisation such as asset manager Black Rock may provide the simulator purchase funds (much like an aircraft lessor), while the training centre operates the device.
Not surprisingly, the vendors with the longest pedigrees prefer to promote their staying power and depth. FSI, which opened its doors in 1951, has a ‘fleet’ of nearly 400 simulators at their commercial, business aviation and helicopter training centres worldwide. “We’re keenly aware of what is required to keep that fleet going,” notes Van Maren. “Smaller vendors have to amortise the development cost of upgrades and standards changes across a much smaller fleet.”
CAE, launched in 1947, “has more than 100 people in customer support and 2200 engineers backing up the simulator design,” notes Fisher. “All of that know-how and DNA are in the next simulator going out the door.” For example, Fisher says CAE has produced more than 140 FFSs just for 737 variants.
There are few start-ups in the current vendor mix, though. Even Mechtronix and Opinicus recently celebrated 25 years, and Frasca began 55 years ago.
The “new” airline simulator entrants have substantial histories as well. Rockwell scooped up in succession simulator integrator NLX, image generator stalwart Evans & Sutherland, industry-leading SEOS Displays, and Blue Ridge Simulation. L-3 already had the iconic Link in its stable for military programs, and won the bidding for Thales’ civil simulator resources in the UK. Lockheed-Martin, the largest US defence contractor, purchased the relatively youthful SIM-Industries (founded 2004) in 2011.
Since full flight simulators are not inexpensive – from several million dollars for a narrow-body such as an Airbus A320 or Boeing 737 model to more than US$20 million for A380s and 747s – many focus on the up-front cost.
L-3 Link Simulation & Training president Lenny Genna says his team is focused on “making sure life-cycle costs are as small as possible. The device will be running around the clock. It needs to be as efficient as possible. It needs to upgraded very quickly.” Genna suggests that an FFS acquisition price which is marginally $100,000 less, but ill-designed for the long term, may well result in a million dollars or more in added cost over the 25- to 30-year life of the device.
Genna also advises prospective customers, “You don’t necessarily have to buy a whole new simulator. If a device was originally designed for X, we can make it a Y; just the cockpit module can be replaced.” The motion base, image generator and visual display can all be reused.
Despite technology’s diminishing importance in the purchase equation, simulator companies continue to seek an edge.
CAE recently unveiled the ‘XR’ variant of its Tropos-6000 image generator, which includes “precise and highly realistic replication” of airport lighting, including through fog conditions. Dynamic shadows are said to be correlated with sun position, and are cast across the ground, buildings, and moving vehicles. CAE is also offering a utility which enables customers to customise each airport.
CAE is beginning to incorporate its Simulator Operations Quality Assurance (SOQA) capability into some new customer devices. SOQA features data and video capture to produce animated visualisation tools for post-FFS debrief.
Rockwell’s EP-8000 high-end image generator has been “an overwhelming success,” claims Ridgeway, who says the company’s IGs own “the highest channel count in the market.” Even while competing with CAE and FSI for simulator sales, Rockwell often supplies the visual for competitor FFSs owing to long-standing customer preferences.
FSI is the only one offering rigid glass mirror displays on motion for commercial aircraft simulators, thanks to their acquisition of Glass Mountain Optics. Van Maren cites the “tremendous brightness and clarity,” including better shadows, sun angle, and special helicopter effects such as rotorwash, plus no distortion at the outer edges of the scene. He also points out that mylar, the stretched film used by other simulator manufacturers for their visual displays, “cannot be cleaned” and often tears or gets scratched. Typical glass configuration is 220 degrees horizontal by 60 degrees vertical, but FSI has gone beyond 300 degrees.
FSI is working on a “new look” redesign of its simulators with the first model in production at their spacious Broken Arrow, Oklahoma US facility. It will include a more roomy aft cabin and changes to the organisation of the instructor-operator station.
CAE has been exploring remote monitoring of simulators, both at its own global training centres and customer sites. “That’s where the industry is driving toward, more to enhance support response and minimize downtime,” says Fisher. “We want to be right there on top of things when the siren goes.”
Time to Buy?
Why jump into the civil aviation simulation market at this time? “There’s growth in the civil market,” believes L-3 Link’s Genna. “For us there are synergies and common technologies with our military business. And this puts us on the map internationally.”
“Our desire was always to get back into the civil market when it was the right time. But starting from scratch was not the right approach. It had to be an acquisition.”
If you’re looking to build a simulator from scratch, plan on a minimum six months to as long as 16-18 months, “depending on how well the customer is prepared,” explains CAE’s Fisher. ‘Discovery’ could take as little as one to two months or three times that. “More and more we are involving the customer at the beginning of the process.” And with respect to aircraft parts and data, historically the long pole in the tent, “we’re trying to get way ahead on that.”
Asia: Half the FFS Market?
With roughly one-third of the world’s 35,000 new aircraft deliveries destined for the Asia-Pacific area over the next 20 years, according to Boeing’s forecast for 2013-2032, China and greater Asia are the prime battlegrounds for FFS sales. As many as 70% of those aircraft will be narrow-bodies, predominantly A320s and B737s, which are easier and cheaper to simulate than more complex wide-bodies. This relatively low barrier to entry invites new simulator vendors into the fray.
Rockwell has a “grand plan” for China which leverages the company’s 30-year presence in the country and their involvement with the avionics suites of various aircraft being produced in the People’s Republic. “We are very focused to capture a share of that market. Our simulator product is well-regarded in the customer community, and our world-class visuals are a huge advantage,” explains LeeAnn Ridgeway, vice president and general manager of simulation and training solutions for Rockwell.
Despite buying the various pieces to fully assemble FFSs, Rockwell has bided its time since the 2008 recession. But meantime sent Andrew Morris, simulation and training business development leader, to pave the way for a joint venture with Beijing Bluesky Aviation Technology, a subsidiary (as so many aerospace companies in China are) of Aviation Industry Corporation of China (AVIC). Rockwell and Bluesky have collaborated on simulators for the MA60, MA600 and C919 programs. Morris notes that Rockwell also has experience building 737 FFSs.
The basic work split will see Bluesky handling the aircraft-specific cockpit module with Rockwell supplying the avionics suite, simulator motion, visual, and remaining infrastructure. “We can have 100% concurrency with the flight deck,” according to Ridgeway. Rockwell will license their architecture “but maintain IP [intellectual property] control.” She adds, “China will rely heavily on the Rockwell Collins brand, and the brand will be pivotal to penetrate outside China.”
Not long ago, CAE was winning nearly every simulator competition in China, with sales veteran Nick Leontidis as point man. Now Leontidis is Group President for CAE’s civil aviation business.
He’ll have his work cut out to remain the front-runner, as it seems just about every vendor has picked up a piece of the action in China and Asia. L-3 Link sold an A320 FFS to Sichuan Airlines and a 777-300ER to Boeing’s Singapore training centre. They also upgraded their Bangkok, Thailand facility with a new A330 FFS, and upgraded the ATR42/72 device there. Mechtronix produced a 737NG for Boeing Singapore, an A320 for ST Aerospace Academy’s Multi-crew Pilot Licence (MPL) program in Singapore, an FFS for the Chinese MA600 turboprop, and a Cessna Citation CJ1 to the Civil Aviation Flight University of China (CAFUC) as part of a 10-year relationship. FSI has sold a couple of A320 FFSs to Wisesoft Corporation of Chengdu, China to support Tibet Airlines. Indra has done half a dozen simulators for Chinese customers, most recently an A320 purchased by Beijing Capital for training Hainan Airlines pilots. Frasca delivered a CJ1+ FFS last year to Nanshan International Flight Academy in Longkou, China.
CAE signed a contract in July with China Eastern for a 737-800 and a 777-300ER. They are deploying A320, A330 and Boeing 737 FFSs this year to the Air China training centre in Beijing. And for the new C919 aircraft being developed by Commercial Aircraft Corporation of China, Ltd. (COMAC), CAE will do the first two FFSs.
“Asia is a big, big focus for us. CAE has made significant investments in the region,” Fisher notes. “Over the next five years, it’s half our plan.”