Heavyweight Contender

For the first time in recent memory, more than one company is selling full flight simulators in double-digits – not just for a year but in only six months. Is there finally a ‘Godzilla’ competitor to CAE’s ‘Kong’ in the commercial airline market? Rick Adams visited Lockheed Martin’s new facility in The Netherlands.

After a 20-minute ride from Amsterdam’s frenetic Schiphol airport terminal, the first impression you get of Lockheed Martin’s new Commercial Flight Training (CFT) facility in Sassenheim is that it’s just another modern office building with plenty of steel and glass. But hold your final judgment for a second impression. When you see the simulator high-bay production area, you recognise the American mega corporation has plans for building a steady stream of training devices in Europe.

There’s room for up to 19 full flight simulators (FFSs) at a time, according to Programme Excellence Manager Allyson Kukel, a California transplant who has been with the organisation a couple of years, long enough to have picked up a hint of a Dutch accent. Within the large, squarish production floor, the simulators follow an invisible, snake-like “flow line.” Each of the six major production phases (cockpit hardware, software integration, etc.) is allocated the same 13 weeks, at least for a straightforward narrow body Airbus A320 or Boeing 737 FFS, or roughly 18 months total. The factory acceptance test phase may be sub-divided into three separate segments. And more complex aircraft models such as wide bodies or new types will understandably take longer.

The flow line is an example of “mothership”, Lockheed Martin’s logistics management and just-in-time supply chain influence, which Neal Tomblyn says has already produced substantial savings. Tomblyn, another American expat transplant from Virginia, is the new Director, Business Development and Strategy for CFT. His background is in air traffic management, as is that of his Washington, DC-based boss, Sandra “Sandy” Samuel, Vice President and General Manager of CFT.

“We’re setting a new standard of design, leveraging the processes and procedures of a world-class corporation and integrating those into CFT. It’s extremely powerful,” Tomblyn told CAT. “Lower life-cycle cost is critical for customers in this market.”

The cost model, coupled with re-branding the former Sim-Industries as Lockheed Martin CFT earlier this year, is apparently gaining traction in the marketplace. In the first six months of 2015, they claim to have sold 10 FFSs worldwide: an A320 for regional U.S. carrier Frontier Airlines, a B737-NG to ANA-owned Pan Am International Flight Academy for its Suvarnabhumi, Thailand centre, and two A320s direct to OEM Airbus in Toulouse, France. Customers for six of the sims are as yet undisclosed.

The 10 FFSs compares with 13 devices which CAE, the industry’s dominator for the past couple of decades, has publicly announced since January. In their past two fiscal years (April-March), CAE has sold 48 (a record) and 41 Level D commercial flight simulators, respectively, whereas Lockheed Martin is the only other manufacturer to crack double digits. L-3 Link Simulation & Training, formerly part of Thales, has announced six FFSs through the first half of 2015.

“Sim-Industries was not a big player,” Kukel acknowledged. Though acquiring the company in 2011, Lockheed Martin did not impose its name until January. “We’re now recognized as a very strong competitor.”

Launched in 2004, Sim-Industries began deploying simulators in 2010, and is credited with more than 40 in the CAT census. Thirteen of those were delivered in 2013 but only two in 2014. The trough “was not indicative” of CFT’s capabilities, explained Kukel, because they were preoccupied with three aircraft types which are completely new developments for them: a Boeing 767 for FedEx, a 777 for Lufthansa, and a 787 model for Aeromexico. The three simulators are prominently parked in front of the second-level walkway overlooking the high-bay.

Lockheed Martin CFT has also established a pair of beachheads in the flight training services market, one in Incheon, South Korea (two B737-800s and an A320 sim) and the other in São Paulo (four B737-800 sims) in support of Brazil-based Gol Transportes Aéreos. Kukel suggested the Sassenheim building has room to accommodate a future training centre as well.

“We see expansion within these centres and expansion with airlines around the world,” said Tomblyn. “Buying a simulator is not necessarily the only business model.” Lockheed Martin offers “power by the hour” leases and even seems willing to use some of its cash to help customers finance their purchases.

In addition to FFSs, the CFT product portfolio includes fixed-base trainers, flat-panel procedures trainers, desktop devices, and computer-based training. Tomblyn said human performance engineering represents the next wave of training enhancement, including applications of data analytics and rules-based decision support tools – domains which will also leverage Lockheed Martin’s military experience. He said its multiple long-term contracts make the Bethesda, Maryland-headquartered company “the world’s largest trainer of pilots.”

Tomblyn said Lockheed Martin is hoping businesses such as CFT will help shift its military-commercial mix of 90%-10%. However, that goal will require numerous other commercial businesses for the US$45-billion defence contractor, considering that simulation market leader CAE’s civil unit is generating revenue of about $1 billion annually.

Lockheed Martin also “wants to become a global company, not just a U.S. company doing business internationally,” Tomblyn noted.

When then-Chairman and CEO Bob Stevens announced Lockheed Martin’s acquisition of Sim-Industries from entrepreneur-founder Frank Uit den Bogaard four years ago, some skeptics questioned the conglomerate’s staying power in the niche civil simulator space. Thales’ simulation unit – once a formidable challenger to CAE – for example, had languished from apparent neglect until rescued by L-3 in 2012. Lockheed Martin previously operated a small commercial flight training centre in Orlando, Florida, for a few years in the 90s but exited the market. With a new design/production facility, a new management team, two training centres, and deep pockets, it would appear they’re back in the airline arena for the long term.