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Canada's CAE in talks with airlines to win more pilot training business

(Reuters) - CAE Inc CAE.TO said on Wednesday it is in advanced discussions with airlines about doing more training of their pilots after the company reported a bigger than expected quarterly loss due to COVID-19.

The world’s largest civil aviation training company is cutting costs and counting on the easing of travel restrictions to bolster demand for pilot-training services.

Revenues from civil training, CAE’s largest business unit,

dropped due to travel restrictions and lower customer demand during the quarter ended June 30, with a center utilization rate averaging 33% compared with 76% during the same three months a year earlier.

Chief Executive Marc Parent told analysts he sees opportunities to win outsourced training business from airlines, which are struggling to conserve cash.

“We’re currently in advanced discussions with a number of airline customers to potentially do more for them,” he said.

Montreal-based CAE said deliveries of flight simulators declined on an annual basis from five to two units during the quarter. CAE would make most of its anticipated 35-40 simulator deliveries during the back half of its fiscal year.

Demand for CAE's flight simulators is linked to new aircraft deliveries by planemakers Boeing Co BA.N and Airbus AIR.PA, which are seeing lower jet sales.

CAE expects to cut about C$100 million in costs over the next 12 months to yield C$50 million in annual savings.

The company swung to a net quarterly loss of C$110.6 million ($83.36 million), or 42 Canadian cents per share, compared with a profit of C$61.5 million a year earlier.

On an adjusted basis, CAE lost 11 Canadian cents per share in the quarter, while its revenue declined 33.3% to C$550.5 million, compared with analysts estimates of a quarterly loss of 6 Canadian cents per share, according to IBES estimates from Refinitiv.

CAE stock was down 1.64% in afternoon trade.

Reporting By Allison Lampert in Montreal and Ankit Ajmera and Sanjana Shivdas in Bengaluru; Editing by Krishna Chandra Eluri, Nick Zieminski and Cynthia Osterman

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