For sale: NATO flying training in Canada program

Summit, Sep 2003 by Latta, Brad

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Bombardier Inc., as part of its new global consolidation strategy, is in the process of divesting itself of its Military Aviation Training business including its participation in the much-publicized [NFTC] program, according to Zev Rosenzweig, vice president of aviation training, Bombardier Aerospace.

The sale of NFTC is close at hand. "We are currently entertaining one bid that may go forward, with another company waiting in the wings," says Rosenzweig. The sale will bring a close to Bombardier's exciting but sometimes bumpy ride on what has been, at $3.3 billion, the largest ever long-term service agreement in Canada between government and the private sector.

Officially opened in July 2000, the NFTC program established an entirely new model for training Canadian and foreign military pilots in Canada. Operating from new facilities in Cold Lake, Alberta, and Moose Jaw, Saskatchewan, the program combined the resources of Bombardier, the prime contractor, and six other private sector participants, with those of the Department of National Defence. Using state-of-the-art equipment and planes, and advanced training, NFTC promised to save the Government of Canada $200 million over 20 years.

But during its start-up period, the program was plagued with technical problems primarily involving its new aircraft. In mid-2002, the Auditor General stated that the NFTC had paid money - specifically $65 million - for training not obtained. Both DND and Bombardier begged to differ, maintaining that the "lost" training would be made up over the life of the contract.

Today, they maintain that the NFTC is on track. "We are very proud of what we have accomplished, says Bombardier's Rosenzweig. "Since the beginning of October last year, we've have met every single requirement of the program." Jim Richardson, the projects procurement director for DND concurs: "Bombardier is now meeting or exceeding the daily contracted sortie rate."

The result has been the promise of increased business. Bombardier expects an additional foreign participant within the next nine months adding to the six countries, including Canada, already on board. Exactly which country remains unspecified at this time but it is noteworthy that Finland recently sent a flight instructor to check out the program, and Sweden has signed an MOU to do likewise.

Richardson makes the point that despite the fact that there are "lots of discussions" taking place behind the scenes between DND and Bombardier about the upcoming sale, its basically "business as usual" for the program. However, he explains, once a conditional sale takes place, the Crown must approve assignment of the contract and it will fall on DND and PWGSC to assess if the risks are reasonable, a process that will take weeks, even months, and may be prolonged by the need to satisfy International Trade in Arms Regulations.

In the end, both Bombardier and DND maintain that the NFTC program will benefit. "We don't necessarily see the sale as a bad thing," says Richardson. "The purchaser, whoever it may be, will be a world player and should add value to the program."

Rosenzweig agrees. "We are only considering companies of major stature that are world players in defence aerospace. BBD is principally a civilian company and we have taken the program about as far as we can. While we have contacts with every airline in the world, what NFTC really needs to prosper further is a company that has contacts with every air force in the world." -Brad Latta, Ottawa

-Brad Latta, Ottawa