CAE signs $100 million of contracts with easyJet, Air China

MONTREAL - Flight simulator and training provider CAE Inc. has added more than $100 million worth of contract wins in China and Europe.

The Montreal-based company said it sold three flight simulators to Air China with a total list value of $42 million.

The flight simulators will be deployed at the airline's training centre in Beijing next year. They'll be used to train pilots and cockpit crews that fly Airbus A320, A330 and Boeing 737 passenger jets.

The orders raised the total full-flight simulator sales this fiscal year to 10.

"The contracts with long-time customer Air China reflect CAE's continued leadership position in China," said Jeff Roberts, CAE's president of civil simulation products, training and services.

"Air China has been a CAE simulator customer for nearly two decades, and we are privileged to continue to serve their flight training needs."

Benoit Poirier of Desjardins Securities said the civil aerospace environment remains solid. CAE won 37 simulator orders last year and expects orders to be in the "mid-30s" in fiscal 2013.

Orders are typically slow in the summer but should ramp up in the fall, helping CAE (TSX:CAE) to meet its simulator sales guidance for the year ending March 2013 on expected delivered to Airbus and Boeing, he wrote in a report.

"Today’s orders reflect CAE’s strong leadership position in China, and solid penetration of emerging markets," he said. Sixty per cent of last year's orders came from Asia and Australia, while 16 per cent were from the Middle East and Africa.

CAE was also selected by European air transport company easyJet to provide long-term pilot training services in a contract valued at more than $60 million, the company said in a separate announcement Tuesday.

CAE has provided simulators and training for easyJet pilots since 2004. The new contract will also provide competency-based Multi-crew Pilot License (MPL) First Officer program training at CAE's recently acquired Oxford Aviation Academy.

The first cadet class will graduate at the start of 2013, two others are in progress, and a fourth will begin by August this year.

CAE added seven training centres to its network by acquiring Oxford in a $314-million deal announced in May. CAE also entered the pilot and maintenance crew sourcing business with the acquisition of Oxford subsidiary Parc Aviation.

Although CAE has been a training supplier to easyJet for eight years the modified agreement increases the duration and scope of its relationship which is "indicative of the type of revenue synergies CAE can generate with its new bandwidth," Poirier added.

CAE will report the results of its first quarter Thursday. Analysts expect it will earn 18 cents per share on $509 million of revenues.

CAE is a global leader in simulation and training for civil aviation and defence. The company employs about 8,000 people at more than 100 sites and training locations in some 30 countries.

On the Toronto Stock Exchange, its shares gained five cents at C$10.03 in morning trading.