- CAE (TSX:CAE) secured a US$300 million contract to continue training U.S. Air Force C-130 Hercules crews through 2035
- The Montreal-based company will provide pilot, flight engineer and navigator training at bases across Arkansas, Georgia, Wyoming, Minnesota, and Missouri
- The deal was announced despite a recent procurement ban by Donald Trump on Canadian items, with questions remaining about whether the order applies to services or U.S.-based subsidiaries
- CAE stock (TSX:CAE) last traded at C$34.30
CAE (TSX:CAE) says it has secured a contract worth approximately US$300 million to continue training U.S. Air Force crews, despite a recent executive order from U.S. President Donald Trump aimed at barring Canadian companies from federal procurement.
The Montreal-based flight simulator and training company announced Monday that the agreement, awarded to its American defence division, extends its role as the primary contractor responsible for training U.S. aircrews on the C-130 Hercules military transport aircraft.
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CAE has held the position since 2018 and will continue providing instruction through 2035 under the new deal. The training program includes pilots, flight engineers and navigators and will take place at Air Force facilities in Little Rock, Arkansas, as well as locations in Georgia, Wyoming, Minnesota and Missouri.
The contract announcement comes just days after President Trump signed a decree on Sept. 16 prohibiting the U.S. federal government from procuring Canadian items, a move that added further tension to an escalating trade dispute between Canada and the United States.
Questions remain about the scope of the order and its potential impact on Canadian businesses operating in the United States. It is not yet clear whether the ban applies strictly to goods or also includes services. Uncertainty also surrounds whether Canadian-owned companies with U.S.-based subsidiaries would be exempt from the restrictions.
The latest procurement ban marks another chapter in the growing trade conflict between the two countries. Relations deteriorated further after bilateral negotiations broke down last month, prompting a series of retaliatory measures and increasing concern among businesses that rely on cross-border commerce.
For CAE, however, the contract is a sign of continued confidence from the U.S. military in the company’s training capabilities. The C-130 Hercules remains a key transport aircraft for the U.S. Air Force, used for cargo transport, troop movements and a range of specialized missions around the world.
“The C-130H remains a critical platform for the U.S. Air Force and CAE is proud to continue delivering the training excellence required to support mission readiness and operational success,” CAE Defence and Security’s interim vice president and general manager, Srini Dixit said in a news release. “As the incumbent training provider, we are committed to providing exceptional performance, innovation, and value while ensuring the C-130H Aircrew Training System evolves to meet the U.S. Air Force’s requirements.”
The new agreement can help ensure that CAE will continue playing a central role in preparing American aircrews for those operations over the next decade, even as uncertainty lingers over the future of Canada-U.S. trade relations and procurement rules.
CAE Inc. operates through three segments: Civil aviation, defence and security, and healthcare. The civil aviation training segment provides comprehensive training solutions for flight, cabin, maintenance, and ground personnel in commercial, business and helicopter aviation, a complete range of flight simulation training devices, ab initio pilot training and crew sourcing services, as well as end-to-end digitally enabled crew management, training operations solutions and optimization software. The defence and security segment provides training and simulation pure play focusing on ensuring mission readiness by integrating systems and solutions across all five domains for government organizations responsible for public safety. The healthcare segment provides healthcare students and clinical professionals innovative, integrated and virtual education and training solutions, including interventional and imaging simulations and curricula.
CAE stock (TSX:CAE) closed 4.73% higher at C$34.33 but is down 17.75% since the beginning of the year.
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