CAE acquires AirAsia’s stake in joint venture
CAE Inc., which provides training and simulation for civil aviation and defence markets, has bought AirAsia’s stake in its joint-venture for $100 million, giving it full control over several training centres scattered across Southeast Asia.
The purchase agreement will see the Montreal-based company gain complete ownership of the Asian Aviation Centre of Excellence training centre, an evenly split joint venture formed in 2011 that has locations in Malaysia, Singapore and Vietnam, as well as an additional stake in another joint-venture training centre in the Philippines.
Marc Parent, CAE’s chief executive and president, called the sale “a natural evolution of our relationship” and said the agreement was a win for both CAE and AirAsia.
“It allows AirAsia to concentrate on its core business by completely outsourcing its training needs to CAE, and it allows CAE to expand its footprint in Asia Pacific, the fastest-growing aviation market,” Parent said in a statement.
Tony Fernandes, AirAsia’s group chief executive who was on hand in Montreal for the announcement, said the partnership with CAE has been a “great success,” with cadets fully trained and now flying as captains.
“We put our full trust in CAE to fulfil our training needs at the highest quality level as we continue to grow,” Fernandes said in a statement.
He added that the airline will dispose of “non-core investments” on a regular basis.
“This stake sale is just part of our long-term plan to monetize all our assets. We are also working on several other divestments of valuable assets including our leasing arm, which is imminent.”
AirAsia, a low-cost carrier that launched in 2001 in Malaysia and services a network of 120 destinations, also extended existing training contracts with CAE through to 2036.
CAE has joint-venture training centres located around the world. Earlier this month, CAE signed a memorandum of understanding with Singapore Airlines to establish a joint venture for pilot training in Singapore.
According to a report released in June by CAE, about 255,000 pilots must enter the global commercial aviation profession in the next 10 years in order to meet growing passenger demand and replace retiring pilots.
Asia’s surging middle class in particular has provided CAE with a thriving market for its aviation training technology.