2020 has turned out to be an “annus horribilis”, to quote someone quite famous, for the Simulation Industry; in fact for the whole civil aviation sector. We thought we might take a little bit of a look back on the year.
It all looked so positive at the beginning of January
Predictions for FSTD sales were robust; the ongoing (or much reported) pilot shortage was coming; Boeing and Airbus deliveries/backlogs were healthy. The major TDMs were continuing to laydown white-tails and life was good. We were also looking forward to the 737MAX return to service, which had been grounded in March 2019. Oh, and there were rumblings about some health problems in China but that was under control, right?
Then we all learnt about Covid-19 and furloughs
By the end of January the first cases were being reported in Europe and in the USA. By March airline traffic in most of the world had basically stopped and locked down; many of the staff involved in both FSTD production and training delivery were not working; most countries having their own versions of furlough schemes. Whilst restrictions were eased over the summer months the autumn has seen a second wave of infections bring fresh lockdowns that seem set for some time. The effect on our industry has been devastating, airline traffic plummeted, training plummeted, FSTD projects dried to a trickle and FSTD manufacture was suspended by most TDMs.
As always when times are hard some companies survive and some go under or get bought out by the stronger companies. The two biggest consolidations so far are CAE’s acquisitions of FSC and TRU Simulation + Training’s civil operation in Montreal. It would be a brave person who betted against more, certainly after a Bloomberg article naming L3 Harris’s training operations. What is for sure is that production capacity will still outstrip demand in 2021 and it doesn’t take a financial genius to work out that some of the remaining established and emerging FFS TDMs must be struggling. From the training delivery side in 2020 we have heard typical FSTD utilisations were down to about 40%. Predictions are that this will increase in 2021 but it is anyone’s guess as to by how much, certainly full capacity is most unlikely.
Industry goes Virtual
Conferences: In a normal year a tremendous amount of our business is initiated and or conducted at one of the round of industry conferences organised by bodies such as FSEMC and Halldale (or at least in the bars and restaurants of these events), these conferences also serve for the industry to share problems and find solutions. Unfortunately, these events were early victims of the pandemic. But all was not lost, although some events were cancelled others went online and the industry responded. Of note was the Global ATS organised by Halldale and the EFTG (European FSTD Technical Group) by FSEMC. Many of us have spent hours in our home offices listening to some (mostly) excellent webinars and presentations on where we are headed and the increasing desire to use more technology such as high end FTDs and VR/AR in our future training methodology.
Industry Initiatives: Things didn’t stop here either. Within EASA the desire to adopt ICAO 9625 edition 4 (Manual of Criteria for the Qualification of FSTDs) culminated in the issuing of the proposed EASA rulemaking document (EASA NPA 2020-15) for fixed wing. This promises to be the biggest change in the way FSTDs are categorised and qualified for forty years by introducing the FSTD Capability Signature (FCS). The link below provides access to a great video summary of the NPA from Traficom , the Finnish regulatory authority. EASA NPA 2020-15 Video Summary
Work has also started on establishing the FCS concept for rotary wing aircraft.
And we should not forget that, after eight years of working groups, the EASA/FAA finally brought the BASA initiative to fruition and the agreement was signed into law.
BREXIT and all that
But didn’t Boris “Get BREXIT Done”? well, sort of. There was a backstop agreement signed and yes, the UK formally left the EU in January 2020 but leaving the single market and the UK following EU rules, was postponed until the end of 2020. As we write in late December there seems to be a post BREXIT trade agreement in place, subject to parliamentary ratification. The feared tariffs look to have been avoided but the UK’s decision to leave EASA has implications for our industry. As to the effects; well the good news is that there appears to be some potential in the trade agreement for mutual recognition transition arrangements for pilot licensing, training and FSTD qualifications.
Reasons to be cheerful; one, two, three
So is it all doom and gloom? In some ways that depends whether you are a glass half empty person or a glass half full person. So reasons to be cheerful:
One – China and Asia have weathered the storm better than most of the rest of the world and traffic levels are recovering faster than elsewhere. It shows that travel can return, and with it the demand for training activities and resources.
Two – The Vaccines are looking good so far, although the benefits won’t be immediate as it will take time for a critical mass of the population to be vaccinated.
Three – We will come out of this stronger and leaner. As with previous crisis (Year 2001 attacks in America and two Gulf wars for example) we’ve seen an accelerated retiring of older aircraft fleets but there will still be the need for newer, more efficient, aircraft and training to support them.
What about Sim Ops and the future?
So Sim Ops sets itself up in the middle of the worst downturn in the history of the simulation industry, why on earth would we do that? A good question but arguably it's also the best time to try a different approach, something new that will be ready to react and “give back” to industry in the “new normal” , whenever we all figure out what that is. Recognising the FSTD industry downsizing, consolidations and travel restrictions affecting business operations we saw a good opportunity to do things differently. We created the Sim Ops network of experienced resources and professionals in our industry who, for various reasons, found themselves with time on their hands and were not ready to retire and then started connecting them to support FSTD technical support, installation and update projects in their locale. We will see how it evolves in 2021 but remote operations, training and working from home are going to be with us for a while yet despite the rollout of vaccines. The industry business model has changed for more than just the short term in our view.
How can Sim Ops Help
Well, one thing’s for sure we don’t have a magic wand to cure the industry’s woes. However, whatever your project in 2021 we are here to help if you need it. Our hope is the readers of our blogs in 2020 have enjoyed them. We have tried to take a slightly light-hearted approach to current and enduring issues in the industry. Do let us know if there are any topics you would like us to pontificate over next year and we wish you all a happy new year.
Wishing you all a healthy and prosperous new year in 2021.
Mark Dransfield, Graham Pritchard, Patric Mac Donald