Iran war hammers CAE's bottom line, with training centre shutdowns on the horizon

CAE Inc. chief executive Matthew Bromberg, left, and Prime Minister Mark Carney tour company facilities in Montreal, on Tuesday, Feb. 17, 2026. (THE CANADIAN PRESS/Christinne Muschi)

The head of CAE Inc. says the Iran war is poised to continue hammering its bottom line, as the flight simulator maker scales back its footprint abroad to cut costs.

The turmoil in the Persian Gulf is “having a month-by-month impact” on bookings and sales, said CEO Matthew Bromberg, with airlines slashing flight schedules and dialing back pilot training in a conflict zone.

“The training market remains subdued, and recent developments in the Middle East are expected to continue to impact our operations and customers,” he told analysts on a conference call Friday.

Soaring jet fuel costs caused by the closure of the Strait of Hormuz play a role in the demand destruction, pushing carriers to shed lucrative routes and further depressing the need for pilot training -- potentially for months ahead -- he said.

The Montreal-based company’s share price fell 13 per cent by midday Friday to trade at a 52-week low.

The upheaval comes as CAE enters what Bromberg calls a “reset year,” with the organization six months into a transformation plan that will see it remove 10 per cent of its commercial flight simulators to lower costs.

Another dozen or so will be relocated, he said. Four to six training centres will also be shut down -- one already has been. The result will be a global footprint that is 300,000 square feet smaller than before, reducing rent and labour expenses from an “overbuilt” network, he said.

However, CAE could lose some clients in the process.

“While we are working closely with customers to retain their business, we expect some stranded cost and attrition as we consolidate sites,” Bromberg said.

“We will sweat our assets,” he said. “This is heavy lifting. This is hard work.”

After markets closed Thursday, CAE reported its fourth-quarter profit plunged 46 per cent year-over-year to $73.1 million, even as revenues ticked up four per cent to $1.33 billion.

For the coming year, CAE expects revenue growth in the low-single-digit percentage range and adjusted earnings per share of between $1.21 to $1.28.

That outlook assumes the Middle East war winds down before October, CAE said.

Longer term, the company aims to achieve up to $150 million in annual savings by 2030 and bring in up to $1 billion in adjusted segment operating income versus $710.7 million in its 2026 fiscal year.

“As air traffic grows four to five per cent ... the need for simulators is going to grow four to five per cent, and we’re the market leader,” he said.

CAE counted 371 full-flight simulators across the globe as of March 31.

The company’s backlog at the end of its fiscal year sat at about $19.3 billion, roughly four per cent lower than 12 months earlier.

“2026 was one of the lightest order years we’ve had since COVID, so we have a much lower backlog going into the year,” said Bromberg.

Christopher Reynolds, The Canadian Press

This report by The Canadian Press was first published May 22, 2026.