CAE announced it has taken a series of flexible measures to protect its financial position in response to the COVID-19 crisis and mitigate the impact on its employees.
The measures include temporarily suspending its common share dividend and share repurchase plan, as well temporarily laying off 2,600 of its 10,500 employees and placing another 900 employees on a reduced work week. CAE also announced that, in an effort to help save lives, it is developing an easy-to-manufacture ventilator which will provide life support to patients in intensive care.
“CAE continues to support its customers as the training services we provide are considered essential around the world. Our Civil Aviation operations are most affected by the unprecedented disruption of the global air transportation system. At the same time, our Defence & Security operations are less impacted because CAE provides mission critical services worldwide,” said Marc Parent (photo), CAE’s President and CEO.
“We entered this crisis from a position of strength with a leading market position, a balanced business with recurring revenue streams, and a solid financial position. Taking decisive yet flexible action will help to protect our people and operations over the short-term and gives us the necessary agility to resume long-term growth when global air travel returns. Our employees have always been at the core of CAE’s success, we regret the hardship these temporary measures will cause those affected, especially during these difficult times,” Parent added.
To mitigate the number of temporary layoffs, CAE significantly reduced capital expenditures and R&D investments. The company also announced cost-containment measures, including salary freezes and salary reductions for staff not affected by reduced work weeks (50% for the CEO and executive team, 30% for vice presidents, 20% for directors and managers, and 10% for group leaders and employees).
CAE is working to access government emergency relief measures and wage subsidy programs in its main operating jurisdictions and will assess their impact on its mitigation plans. As details of government assistance programs around the world are finalized, CAE will do everything it can to recall as many employees as possible.
In Civil aviation, training is highly regulated, and for pilots to remain active and to continue to hold their certifications, they must train regularly - usually every 6 to 9 months. While training activities related to new pilot training have decreased substantially, many airlines and business jet operators have continued to conduct recurrent training to maintain the certification of their existing pilots. Two-thirds of CAE’s more than 50 civil training centres worldwide continue to be operational, however training utilization is lower than usual as a result of restrictions from border closures and lockdowns.
In Defence & Security, as underscored by governments worldwide, CAE’s work is considered essential, and its employees are deployed worldwide to actively support training and readiness requirements. Over 90% of CAE’s operational sites are still delivering services to support defence forces who must always be prepared and ready in the interest of national security.
To help in the fight against COVID-19, CAE Healthcare engineers and scientists have designed in 11 days a simple, maintainable, easy-to-manufacture ventilator prototype to provide life support to patients in intensive care. CAE is currently sourcing components in order to begin production of this ventilator as soon as it is approved by Health Canada.
CAE is also providing complimentary training seminars on how to prepare healthcare workers in the fight against COVID-19. The CAE team is launching simulation-based training solutions, both web and hardware based, to train personnel in the safe practice of ventilation and intubation, which is key to saving lives.
CAE is a global leader in training for the civil aviation, defence and security, and healthcare markets. Backed by a record of more than 70 years of industry firsts, CAE has the broadest global presence in the industry, with over 10,500 employees, 160 sites and training locations in over 35 countries. Each year, CAE trains more than 220,000 civil and defence crewmembers, including more than 135,000 pilots, and thousands of healthcare professionals worldwide.