Link Simulation & Training UK ("Link UK"), an
L-3 Communications Holdings Inc.
) business in Crawley, U.K. has received a contract for the
delivery of two A320 Full Flight Simulators and one A320 Flat Panel
Trainer from China-based Spring Airlines.
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These A320 Full Flight Simulators will make use of L-3 Link UK's
modular RealitySeven simulation architecture. The RealitySeven
simulator solution applies commercial-off-the-shelf technologies in
order to reduce a trainer's life-cycle costs. The A320 Flat Panel
Trainer will support procedural training, which will reduce the
amount of time required in the Full Flight Simulators.
All the training devices will be supplied during the fourth quarter
of 2013 to the airline's future training center at Shanghai Pudong
Link Simulation & Training UK (Link UK) business was recently
acquired by L-3 Communications. In August this year, the company
completed the acquisition of Thales Training & Simulation Ltd's
civil aircraft simulation and training business for $130 million.
The business is now known as L-3 Link Simulation & Training
U.K. Limited and has become a part of L-3's existing Link
Simulation & Training division, which is a unit of L-3's
Electronic Systems Group.
L-3 Link Simulation & Training is a world leader in providing
total training solutions for operators and maintainers across a
wide range of military and civil aircraft platforms. Its innovative
solutions offer a variety of modern training technologies that
includes high-fidelity immersive simulations and distributed
academic and interactive courseware.
L-3 Communications' revenue base is spread across a broad
diversification of programs. Future growth will be driven by its
strong presence in the current focus areas of command, control,
communications, intelligence, surveillance and reconnaissance
("C3ISR") equipment; precision-guided weapons; unmanned aerial
vehicles (UAVs); and other electro-mechanical robotic capabilities.
The acquisition of Thales Training & Simulation has
strengthened L-3's Electronic Systems Group with its full flight
simulator capability and has helped in expanding into the civil
simulation market. The company will thus be able to offer a full
range of total training system solutions to its military as well as
commercial customers. This would not only expand the company's
global presence, but will diversify its product offering. Over the
longer run, we view the company as one of the best-positioned pure
defense players based on its non-platform focus, broad
diversification of programs and its focus on shareholder value.
However, negative offsets include the loss of key contracts,
defense spending cuts and the lack of near-term catalysts. Order
growth and volume increases also remain dubious in this challenging
environment. The company presently retains a short-term Zacks #4
Rank (Sell). We have a long-term Neutral recommendation on the
Based in New York City, L-3 Communications is a prime contractor in
C3ISR systems, aircraft modernization and maintenance, and national
security solutions. L-3 is also a leading provider of a broad range
of electronic systems used on military and commercial platforms.
The company mainly competes with
FLIR Systems, Inc.
API Technologies Corporation