Oxford Aviation sold?

[airspace alpha]

There is a thread just started over on Professional Pilot Training stating that Oxford Aviation has been sold to the multi-national conglomerate CAE aviation, which in many ways is Oxford's direct competition. Not confirmed yet.

If it's true what next for OAA in Moorabbin? Or the CAE Global Academy in Jandakot for that matter. I suspect the main reason for the sale is the simulator business as CAE is a major player but can we see a readjustment of sites for ab-initio training in the future?

[LexAir]

Let's hope the standards improve under the new owners.

[The Kelpie]

Any truth in the rumour that the Moorabbin operation does not feature in CAEs plans for the future?

I heard that there have been meetings going on over the last few days with a view to selling it on. Perhaps CTC or FTA may be potential buyers to increase their client bases?

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The Kelpie

[BlatantLiar]

Any reason for the sale?

[havick]

Why would FTA buy it (someone else's problems)?

The clients may move on their own accord.

[ZFT]

Another nail in the coffin – Once CAE achieves global domination rates will skyrocket as it will be ‘take it or leave it’. The small independents will now either be picked off one by one or forced out of business, whichever is more convenient.

Unfortunately, Star was never in the business for any reason other than financial. Wonder were this leaves SAS now?

Boeing Training & Flight Services are really only interested in supporting Boeings needs and Airbus have already committed to an exclusivity arrangement with CAE.

Thales/L-3 is too inexperienced and immature to attack the CAE empire now. There really is nothing to stop them.

[peterc005]

Might be an improvement. Flying schools are very capital-intensive, so possibly a large operation would be more efficient and able to acquire and utilise a bigger and better fleet of planes.

You'd also hope that the bigger operation would facilitate the development of a better curriculum.

Another possibility is that t would create a better known, almost universal, brand that would be appreciated by airlines.

Existing smaller flying schools are largely niche players anyone and I suspect this would continue.

One thing that impressed me about Oxford, after GFS, was the ability to move staff and planes between continents as required. Seems sensible to me, and the opportunity for young instructors to work overseas is a great idea.

[The Kelpie]

Why would FTA buy it (someone else's problems)?

The clients may move on their own accord.

Businesses with structural and operational problems evidenced by poor performance are often seen as a sacrificial part of a wider business when restructuring and are often picked up for a bargain price. New management comes in and fixes it up and then hey presto, a performing business that is worth a lot more than was paid for it.

There may be many other business reasons other than simply increasing market share. I will share one or two of my thoughts although I do have others.

Oxford has a Pretty slick marketing model (Petteford the salesman saw to that!!) and has a fleet of modern aircraft fitting with G1000's. This is what the airlines are now demanding and an operation with an existing fleet is an option to be considered if you have more clients than you can handle knocking at your door and you don't want to wait to buy new aircraft and simulators fitted with the latest avionics from manufacturers.

Sure, potential customers could migrate from Oxford to say FTA or CTC but if you don't have the capacity (access to sufficient levels of instructors, aircraft , ground school facilities, accommodation etc.) then you just can't take them in. From what I am led to believe FTA and CTC are at max capacity as it is with their existing clients and have little capacity to accommodate potential new clients.

For FTA and CTC it would perhaps be an opportunity for expansion whilst at the same time increasing their client base to move some of their eggs into other baskets. With the aus dollar still high against the us dollar competing for international work is tough and as an australian company, Oxford have two significant domestic clients including a significant stream of 'privately funded' guys from Swinburne uni (who drawdown government funding) as their preferred status flight training provider.

Perhaps Swinburne might even have a look themselves seeing as they spend a significant amount of money there each year and Oxford were not exactly shall we say 'competitive' price wise!!


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The Kelpie