CAE-China Southern JV grows amid strong demand for aviation training in China MONTREAL, Dec. 23 /PRNewswire-FirstCall/ -- (NYSE: CGT; TSX: CAE) - CAE and China Southern Airlines are growing their joint venture business by adding an Airbus A321 full-flight simulator to the Zhuhai Xiang Yi Aviation Technology training centre in Zhuhai, Guangdong province, China. China Southern Airlines and China Northern Airlines, along with other airlines within the China Southern group, are expected to begin training on this device in September 2004. Over the life of the fifteen-year joint venture, which was announced in November 2002, the A321 simulator is expected to yield average annual revenues of C$3 million. CAE holds a 49 per cent equity interest in the company resulting from the joint venture, with China Southern holding the remaining 51 per cent. "Adding to our simulator fleet signals that demand for the joint venture's services is strong," said Gary Scott, CAE's group president for civil simulation and training. "We're confident of continued growth in the Chinese market, as the country sets out to transform itself into one of the world's largest aviation markets. Demand for training equipment and services will follow suit." "This joint venture is meeting both companies' expectations," said Yan Zhi Qing, chairman, China Southern Airlines. "It helps to further validate that China Southern is a major player in the worldwide aviation market." The A321 is slated to become the seventh full-flight simulator housed at the 10-bay centre. The sale of this simulator, which will be equipped with the CAE Tropos(TM) visual system, marks the 12th order that CAE has received this fiscal year. It had won a total of 11 competed orders for all of last fiscal year. The CAE-China Southern joint venture is an outgrowth of CAE's strategy to form training alliances with established airlines, including ones with Emirates of the Middle East, Italian flag carrier Alitalia and Spain's Iberia Airlines. CAE has an installed base of more than 100 full-flight simulators in its global network of training centres, with 20 locations on four continents. China Southern Airlines connects more than 80 cities throughout Asia and around the globe, transporting over 19 million passengers annually. Under an industry restructuring, China Southern Airlines recently united with China Northern Airlines and Xinjiang Airlines to form the China Southern Air Holding Company, comprising a fleet of over 180 aircraft with 40 per cent of China's domestic market share. CAE is a leading provider of integrated training solutions and advanced simulation and controls technologies to civil aviation, military and marine customers. The company generates annual revenues in excess of C$1 billion and employs about 6,000 people in Canada, the United States and around the globe. High-resolution downloadable photos are available in the Photo Gallery section of CAE's Web site: http://www.cae.com/en/photos.shtml DATASOURCE: CAE INC. CONTACT: Media contacts: Johanne Denault, Manager, Public Relations, (514) 341-6780 ext. 4889, or Arthur C. Perron, Vice-President, Government and Media Relations, (514) 341-6780 ext. 5370, ; Investor relations: Andrew Arnovitz, Director, Corporate Communications and Investor Relations, (514) 734-5760,

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