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CAE: Training For Pilots And Airlines Is On The Rise!

By Spyros Georgilidakis | November 11, 2020

Following a few days of debate about the future of flight training in the Covid-19 crisis, CAE’s finances show a quarterly profit. The training specialist company expects this trend to continue.

As we have already seen, CAE stepped in earlier in the week to make its own predictions about the future of flight training. This was after the British Airline Pilots Association (BALPA) offered advice to aspiring pilots. Their call was for people to reconsider their choice or carrier, or pick a slower training path than what is common.

CAE’s projections raised some eyebrows. They estimate a demand of 27,000 new pilots by the end of next year and 260,000 pilots by 2030. This is based on retiring pilots, pilots leaving the profession early due to the pandemic and other reasons. Other training organizations seem to corroborate CAE’s training numbers.

CAE: Training For Pilots And Airlines Is On The Rise!

The problem, of course, is that both BALPA and CAE plus other training organisations have vested interests on the matter. That makes actual financial results more interesting. The company’s adjusted profits amount to a quarter profit of C$34.2 million, with a cash flow of C$44.9 million.

Of course it’s important to point out that CAE isn’t simply a flight training school. They are the world’s largest civil aviation training organisation – with a military aviation training branch as well. They provide training both to student pilots and to airlines and other ATOs, supplying flight simulators and other equipment. Their finances are directly dependant on what airlines are doing, both in terms of aircraft purchases and crew training.

 

…And An Airline CEO Seems To Agree

Also on Tuesday, Ryanair CEO Michael O’Leary in an interview discussed the likely recovery period of the aviation industry. This was after the announcement of successful Covid-19 vaccine trials. He had some interesting thoughts:

I’ve heard lots of rubbish coming out of mainly the legacy airlines, ‘Oh, it’ll be 2050 before the world recovers from this, it’ll be 2025 before volumes go back to where they were in 2019…’, rubbish!

 

Volumes will go back in 2021 and 2022 pretty quickly. They will go back because the airlines, led by Ryanair, will discount prices. Hotels will discount prices in the summer of 2021, the winter of ’21 and into the summer of ’22. We will all discount to try to recover the business we lost.

 

I think the volume recovery will be quite strong… It will take a longer period of time, three or four years, for pricing to recover to 2019 levels. But I think the volume recovery would be strong and maybe surprisingly so.

Going further, O’Leary did clarify that he doesn’t expect long-haul travel to recover quite as quickly. He expects Europeans to first venture closer to home, as a relief from the pandemic. He estimates they will venture further away in the following years.

The above does suggest that the industry won’t fully recover (in passenger numbers) next summer. But we knew this already. For Ryanair, O’Leary now expects summer passenger numbers at 75-80% of 2019 levels.

It’s worth remembering that someone starting pilot training now, won’t start looking for employment before the summer of 2022. And will need a few months of additional training, beyond that. With what we see from CAE and hear from Ryanair, the pilot training picture seems very different from what BALPA were suggesting.

 

Sources: here and here

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