Friday, April 3, 2015

Growth continues in the flight training and simulator business. But some training schools are struggling to attract student pilots

Record orders for new commercial aircraft and a compelling need for airline pilots worldwide is driving growth of the commercial flight training and simulation sector. But the rising cost of training and waning interest in a pilot career could slow growth in the training sector, according to a new study.
“It is a mixed bag of news,” said Wayne Plucker, Frost and Sullivan’s aerospace defense director and author of the manufacturer driven study. “The simulator manufacturing and training businesses in general is doing relatively well and adding competitors.”
The Commercial Flight Training and Simulation Market analysis said the commercial flight training industry posted revenue of $1.44 billion in 2014 and estimates annual revenue to reach $1.54 billion by 2020. The commercial flight simulation market earned revenue of $1.06 billion in 2014 and it is expected to rise by $1.43 billion by 2020.
“We had a record year last year and are training like crazy,” said Sherry Carbary, Boeing VP Flight Services Sherry Carbary. Airlines providing in-house training are also “quite busy,” she added.
University affiliated flight schools such as Daytona Beach, Fla.-based Embry-Riddle Aeronautical University (ERAU) and UND Aerospace, part of the University of North Dakota, are two schools where student enrollment remains stable, but there is little growth, according to Plucker. These schools offer four-year degrees along with ab initio and advanced pilot training majors.
Some US schools have canceled aviation programs for lack of enrollment. St. Cloud University, University of Illinois, as well as the pilot programs at Jet University have closed, Plucker said.

Independent training companies have been hardest hit. Some schools are filling their classrooms with international student pilots, of whom many are sponsored by the airlines that will hire them. Prospective pilots from the Middle East and the Asia-Pacific dominate enrollment at these independent schools.
In some cases, training non-US pilots isn’t enough to stay afloat.  Wright Flyers Academy in San Antonio, Texas, which was training Chinese pilots, is one of those independent companies to have shut down. Internationally, Singapore Flying College, which provided training on jet aircraft, has closed.
Predictably, the driver for buying new simulators and training devices corresponds with the acquisition of new airplanes or upgraded models of existing aircraft. As new aircraft sales go, so goes the growth of training and simulator manufacturing business.

Several major international airlines told ATW they continue to acquire full flight simulators to support their in-house training of pilots, aircraft maintenance technicians, flight attendants and aircraft dispatchers. These bigger carriers are also strengthening their relationships with large providers of training solutions and instructors.
Some regional airlines told Plucker they are postponing purchases of full flight simulators and flight training devices because they are concerned about their sustained profitability. List prices for a full flight simulator for airliners can range from $11 million to $20 million per device, according to CAE.

Meanwhile, the cost of pilot training related to new stringent requirements for hiring airline pilots has prompted some young people to rethink their career choice, particularly in the US.
[FAA rules state that prospective airline pilots must have an Air Transport Pilot (ATP) certificate and 1,500 hours of total flight time to become a first officer at a US airline. In some circumstances, pilots affiliated with a recognized college or university can obtain a restricted ATP and get hired by airlines.] 
“Absolutely, the cost of training is a factor,” Plucker said. “It does not make any economic sense for a prospective pilot to drop $80,000 into what is going to be a $25,000 a year job initially.”
Varying perspectives
Boeing forecasts a worldwide demand for 533,000 new commercial pilots and 584,000 new aviation maintenance technicians (AMTs) over the next 20 years; 40% of the pilot need is in Asia. US airlines are expected to hire in excess of 95,000 pilots during that time, according to a separate university study.
Meeting that demand is challenging. There is the much talked-about pilot shortage, which is being exacerbated by the increase in the retirements of senior airline pilots. Pilot retirements are expected to increase until around 2024 and then taper off, according to a UND Aerospace official. Increasing retirements and attrition will account for a shortfall of around 35,000 airline pilots.
Not everyone believes there is a pilot shortage, particularly at major airlines.
“We have thousands of pilots in our select pool and have yet to experience a lack of qualified applicants,” Scott Nutter, general manager Delta Aircrew Training Center, Delta Air Lines, said. “That said, our regional partners have expressed difficulty in filling regional airliner cockpits.”
Faye Malarkey Black, interim president of the Regional Airline Association, confirmed the shortage is hurting US regional airlines. “Yes, the pilot shortage is real and its impact is already being felt.
Service cuts are taking place and some regional airlines have had to park aircraft,” she said.

There are other concerns among trainers. “If there is a pilot shortage, there is also a shortage of certified flight instructors (CFI),” ERAU flight department chairman Ken Brynes said. In 2013, ERAU had 165 flight instructors. Then it lost 65% of its CFIs to airlines, mostly.
Airlines aren’t the only pilferers of CFIs, said Brynes. Some CFIs are going to work for companies that fly or manufacture drones, such as General Atomics Aeronautical, which makes the Predator.

“They start out making $110,000 a year. It’s hard for an airline to compete with something like that,” Byrnes said.
There are other concerns. US airlines told Byrnes they increased their pilot roster by 10% to meet the requirements for FAA’s flight time-duty time rules, which requires pilots to get a minimum of eight hours of uninterrupted sleep between flying assignments. JetBlue Airways, United Airlines and several regional carriers have hired additional pilots to meet the rule, he said.
Dayton, Ohio-based PSA Airlines is training up to 70 new pilots per month to crew new aircraft, including the Bombardier CRJ900, of which PSA had 19 as of February 2015.
The pool of pilots could diminish further because young people are no longer as interested in a pilot career. UND Aerospace polled prospective pilots in 2013 on their career aspirations. Of the 1,767 individuals that participated in the survey, 8.32% had changed their minds about pursuing an airline career “because of the [then proposed] first officer qualification rule,” UND Aerospace director aviation industry relations Kent Lovelace said.
Approximately 32.53% said they were rethinking their career path, while 53.67% still wanted to be a commercial pilot. Not everyone wanting to be a commercially rated pilot wants to work for an airline, Lovelace noted. UND Aerospace is redoing the survey this year to see if views have changed since the final rule passed.
History might offer a guide on a possible trend. Fifteen years ago, 75%-80% of UND Aerospace’s students were in the professional pilot track, Lovelace said. That number has dropped to 60%.
OEMs & new players
Training centers owned or aligned with the OEMs are riding high as a direct result of record orders for new airliners and projected increase in passenger traffic.
Boeing Flight Services’ Singapore campus continues to expand, as does its Shanghai campus. The division of Boeing Commercial is building a training center in Moscow to support the Russian carriers. Boeing has 18 training sites worldwide. In July 2014, Boeing launched its pilot development program, which takes cadet pilots through ab initio, Jet Bridge and type rating training.
Elsewhere there is movement. The 121,000-sq. ft. Airbus Flight Training Center in Miami trained over 2,000 pilots in 2014 and expects to train more this year. The Center also trains AMTs and cabin staff. The facility trains pilots from the Americas primarily on the A320, A340 and soon the A350 simulator.
Other training sites include Toulouse, which handles training for airlines based in Europe and the Middle East; the Beijing center handles training of Asian airlines. All three centers train pilots, AMTs, cabin crew and dispatchers.
 “As time goes on, we intend to take the training to the customer,” Airbus Training Center director of flight training Thomas Walby said. That is a “shift in philosophy” for Airbus, he added. This “customer intimacy” program is designed to reduce customer-training costs.
Flight Safety International (FSI) is supporting Airbus training in Miami with the delivery late last year of new A320 full-flight simulators (FFS), and it is building the third A320 simulator for Wisesoft Corp. of China to be housed at the SafetyWing Aviation Training in Chengdu to support Tibet Airlines. FSI has delivered over 140 simulators for commercial use.
But the biggest news for FSI is the plan to build a training center in Denver, Colorado to support SkyWest Airlines and Air Methods, a helicopter EMS provider. Four of the simulator bays at the new center will provider regional jet training for SkyWest pilots, according to David Davenport, FlightSafety EVP, commercial.
Several training centers said they are enhancing training programs and simulators to include NextGen-related training on Automatic Dependent Surveillance-Broadcast (ADS-B), Required Navigation Performance, Automated GPS approaches, high-level approaches and enhanced vision systems.
Pan Am Academy
Pan American International Flight Academy is on the upswing after being acquired by ANA Holdings Inc., parent of ANA Airlines.
“They have a vested interest in developing Pan Am into a global brand,” EVP Mark Johnson said. Interest includes a willingness to invest in new simulator equipment and training solutions for the Miami-based Center and expand the Pan Am brand elsewhere.
ANA recently formed Pan Am International Flight Training Center in Bangkok, Thailand, located on the campus of Assumption University.
Greg Darrow, senior advisor for sales and marketing, said the Pan Am acquisition was never about buying a training house to instruct ANA personnel. The acquisition was about expanding ANA’s business through diversification and becoming a trainer for other airlines. ANA already owns the ANA Training Center at Tokyo’s Haneda Airport, which houses 16 full flight simulators. There is also the Panda Flight Academy, Pan Am’s sister company in Japan. ANA also owns USA Pan Am Flight Training Center in Bangkok.
Some established training solutions providers are growing through partnerships, including CAE and Rockwell Collins.
“We have moved the business footprint over the past six months significantly,” CAE group president, civil simulation and training Nicholas Leontidis said. “We continue to expand our partnerships.”
CAE in January entered into a joint venture agreement with Shanghai Eastern Flight Training Co., (SEFTC), a wholly owned subsidiary of China Eastern Airlines. The partnership involved the sale of 50% of CAE’s flight academy in Melbourne, Australia. China Eastern Airlines will outsource to CAE Oxford Aviation Academy in Melbourne the training of more than 650 of its cadet pilots over the next five years.
That same month Emirates Airline announced it would increase its annual cadet-training intake at CAE Oxford Aviation Academy to 55 cadets during 2015.
CAE Oxford Aviation Academy has training locations in Australia, Belgium, Singapore, India, the Netherlands, the UK and the US.
Rockwell Collins and Beijing Bluesky Aviation Technology will soon open the ACCEL (Tianjin) Flight Simulation Co. joint venture. Rockwell Collins is providing visual systems and flight deck electronics for air transport category aircraft simulators.
“We are incubating a new capability inside of China,” Rockwell Collins Training Group air transport senior director Steve Keane said.
That capability will include simulator manufacturing and training pilots for 90-seat and above aircraft, Keane said. The facility, scheduled to open in early spring, will begin training soon.
L-3 Link, which acquired UK-based Thales Simulation and Training, is seeing significant growth at its L-3 Asian Aviation Training Center (AATC) in Bangkok “due to new airlines entering into the market in the South East Asia region,” sales, marketing and customer director Mitesh Patel said.
The center has added two A320 FFSs, an A330 FFS and an ATR72-600 FFS. In addition, an A320/A330 aircrew procedures trainer (APT) and ATR 72-600 Flat Panel Trainer (FPT) have been installed.
The demand for thousands of new airline pilots over the next 20 years has brought newcomers to the civil training business and established players to join forces.
Lockheed Martin, known mainly as a defense contractor, acquired Sim Industries in 2011 and in January 2015 changed the company name to Lockheed Martin Commercial Flight Training (LMCFT). The company’s São Paulo, Brazil training facility has trained more than 1,700 pilots for GOL Airlines in the last two years. The LMCFT Incheon, Korea, training center provides a suite of commercial aviation training products and services including FFS Airbus and Boeing aircraft.
Air Busan (A320) and T’Way Air (737NG) are among LMCFT’s airline customers at the Incheon center.
The Sim Industries acquisition was a good fit in “leveraging our experience as a leading provider of military training with a near adjacent foray into commercial markets,” LMCFT business development director Paul Thierry said. “The underlying economics are attractive. There is an insatiable demand in commercial flight.”
Tru Simulation + Training, a Textron Inc. company, is the amalgamation of a merger between Montreal-based Mechtronix and Florida-based Opinicus, which were acquired in November 2013 by Textron. The Goose Creek, SC-based company bears watching. Tru Simulation is supplying the full flight simulator training suite for Boeing’s new single-aisle 737 MAX. Delivery of the first suite is expected in 2017 and will include a flight and procedures trainer with 3D hardware components and a desktop trainers for classroom instruction.
Seminal Training Events

Training experts views vary on what has been the most defining event in the training and simulation business over the last decade.

While new full flight simulators for next generation airliners and related training tools are noteworthy, “AQP  Advanced Qualification Program] is the most profound, enlightened change to take place in pilot training since its inception in 1991,” Scott Nutter, general manager Delta Aircrew Training Center, Delta Air Lines, said.

A close second, Nutter said, could be the addition of evidence-based training, a subset of competency-based training. EBT could be defined as using operational data collected during day-to-day flying to help formulate an activist approach to pilot training. Data is used to help identify and predict pilot behavior and skill problems, and then used in training.

The changing rules for newly hired airline pilots at US carriers, plus the desire of non-US carriers to obtain additional training voluntarily on new aircraft are two big changes in the commercial training business, Airbus Training Center flight training director Thomas Walby said.

Others point to the adoption of Multi Crew Pilot License (MPL) program by ICAO and the regulatory authorities of numerous countries—but not the US—has provided the biggest change in training.

“The adoption of MPL across the world has changed the profile of the types of training to be delivered and the associated equipment,” L-3 Link Simulation & Training sales, marketing and customer director Mitesh Patel said. “While this has taken longer than we envisaged for many different reasons, there is a view within the industry that the initial teething issues have been understood and lessons have been learned from the early MPL programs.”

Others believe outsourcing training by airlines has been the biggest change.  “In my view, the biggest change has been airlines looking to professional companies to provide their training,” CAE group president, civil simulation and training Nicholas Leontidis, said.

(Robert W. Moorman - ATW News Plus) 

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