CAE has maintained its fiscal 2027 outlook after a solid first quarter, with stronger defence performance, improving business aviation training demand and a sharp improvement in free cash flow helping offset pressure from the Middle East and lower contributions from simulator sales.

The training and simulation specialist reported C$1.17 billion in first-quarter revenue, up 6.8% year over year. Civil Aviation revenue increased 5.6% to C$641.6 million, with CAE highlighting strong business aviation performance and improved training utilisation. Training centre utilisation rose to 72.2% from 68.8%, although Civil adjusted operating income declined 13.7% as higher costs, weaker simulator contributions and disruption in the Middle East weighed on profitability. CAE delivered eight full-flight simulators during the quarter and secured orders for six more.

Defence provided another important source of momentum. Revenue increased 8.3% to C$531.8 million, while adjusted segment operating income rose 9.1%, supported by stronger North American programmes and improved programme execution. Meanwhile, free cash flow reached C$104 million, compared with negative C$134.7 million a year earlier, helped by improved working capital and substantially lower capital expenditure.

CAE continues to expect low-single-digit overall revenue growth for fiscal 2027, with Civil revenue flat to slightly lower and Defence growing at a mid-single-digit rate. Its outlook also assumes ongoing mitigation of Middle East disruption, including moving some training activity elsewhere within its global network.

For business aviation, the results are notable. Higher simulator utilisation suggests demand for recurrent and type-specific training remains resilient, even while new simulator sales fluctuate. With aircraft fleets expanding and qualified pilots remaining in demand, training capacity continues to represent a critical part of the BizAv infrastructure.

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