The Air Force estimates it could save about $1.7 billion over five years by reducing flying hours by 5 percent and shifting more of its pilot and crew training to simulators.
The Navy believes that a roughly $500 million investment in flight simulators over seven years could lower annual aviation training costs by $119 million.
These projections portend lucrative opportunities for the industry that manufactures high-tech combat simulators for the U.S. military. Simulator makers for years have predicted that Pentagon budget cuts and rising fuel prices could work to their benefit. The thinking is that the military will probably have to cut back on live field exercises and increasingly rely on computer-based war gaming and training.
The U.S. military market for combat and weapon simulators currently is valued at about $5 billion a year, according to industry surveys. With training services included, it is an $11-billion-a-year business, says Gene Colabatistto, group president of military products and training services at CAE, a leading manufacturer of flight simulators, based in Montreal, Quebec.
“It’s a pretty big market,” and it could grow in the next several years, he says.
Colabatistto took over CAE’s military sector just six months ago, after spending most of his career in the intelligence community and defense industry. He is bullish about the simulation business, especially as budget cuts are looming for the Pentagon. “Simulation-based training is an obvious hedge against a down budget,” he says in an interview. “It’s one that saves cost.”
But the industry nevertheless should not assume that cutbacks to live training will fuel sales of simulators, Colabatistto cautions.
The government’s budget cycle is such that it can take years for proposed military programs to be funded by Congress. With a flat or declining budget top line, if the Air Force or the Navy decides it wants to reduce live training and spend more on simulators, money would have to be reallocated from the training account to pay for new simulation devices and software. Contractors have to hope that the Pentagon and Congress will back the plan, says Colabatistto, because there will not be “new money” to buy simulators. Once it becomes apparent to the military that simulators could help them save money, he says, it would take two to three years to have funds appropriated.
Contractors in the simulation and training sector today have their eyes on a handful of programs. One is a potential billion-dollar deal to train thousands of Air Force KC-46 tanker pilots and crews over the next two decades. A contract award is expected in early 2013.
CAE, the incumbent contractor for the current tanker trainers, the KC-135, is one of the bidders. Also in the running are Lockheed Martin Corp., The Boeing Co., L-3 Link and FlightSafety.
The project includes both new hardware and schoolhouse services, also referred to as “KC-46 University.”
The Navy also is emerging as a major customer for the simulation industry.
In tactical aviation, for instance, Navy F/A-18E/F Super Hornet pilots perform 18 percent of their training in simulators. By 2020, that percentage will grow to 32, says a Government Accountability Office report to Congress. For the EA-18G electronic warfare fleet, “synthetic” training will climb from 20 to 34 percent by 2020. In the MH-60R and MH-60S helicopter programs, the share of simulation-based training will rise from 38 to 48 percent, and from 41 to 49 percent, respectively.
CAE manufactures the simulators for the Navy’s P-8 maritime patrol aircraft fleet. This program is a “tangible example of how the Navy is changing the training curriculum” and increasing the use of simulators, says Colabatistto.
The Navy will buy 117 P-8 aircraft from Boeing to replace 130 P-3 airplanes. While the P-3 training program includes just six simulators, CAE already is building 10 simulators for the P-8.
Although flight simulators dominate the industry, the military also is seeking to provide synthetic training to ground forces. The Air Force’s own tactical-air controllers — operators who deploy side by side with Army troops to help identify targets for aerial strikes — will be training in “immersive” domes that replicate a war-zone.
During a recent industry trade show in Washington, D.C., Cubic Defense Applications, based in San Diego, displayed one such 360-degree dome that the company expects to sell to the Air Force.
Cubic received a contract from the Air Force Research Laboratory to develop software that can create a seamless training exercise where live aircraft interact with computer-generated entities, including virtual enemy pilots who fly joystick-operated aircraft.
The industry buzzword for this training experience is LVC, for live-virtual-constructive. The live training would be real troops on the ground and actual aircraft flying missions. The virtual piece is a videogame-like simulation that is run by a human operator. The constructive simulation has computer-generated actors that are programmed to operate autonomously, without a human in the loop.
LVC is what the Air Force and Navy believe they need to conduct realistic fifth-generation tactical air warfare training without breaking the bank. The technology would allow commanders to challenge the F-35 Joint Strike Fighter, for example, to defend itself from an attack by simultaneous enemy aircraft and missiles.
Cubic recently performed an LVC demo at Nellis Air Force, Nev., where pilots train for aerial battles.
Creating a training environment that combines so many sources of data is a huge technological challenge, says Bob Pescatore, director of business development at Cubic.
“It’s a lot of information,” he says. In the Nellis demo, friendly forces flew two live F-15 Air Force fighters and two Navy F/A-18 Super Hornets. The enemy fleet had two live F-16 fighters and 12 computer-generated simulations. They were all connected via the Link 16 tactical combat network.
“Four blue [friendly] aircraft saw the constructive targets just like they would see the live targets,” Pescatore says. The blue aircraft’s radar warning receivers were “stimulated” by computer-generated aircraft. “To make that happen you have to modify the software in the aircraft to make it believe the information.” Also, every move by every entity in the war game has to be synchronized to make it realistic. “Software integration is very complicated,” Pescatore says.
The Air Force expects F-35 pilots to train this way, he says. “We need to be able to handle many targets at a time and train to that.” Conducting a large-scale exercise entirely with live aircraft and weapons would be hugely expensive, he says.
The LVC trend also is apparent in Army training. Chief of Staff Gen. Raymond Odierno has directed commanders to revamp exercises to prepare soldiers for complex missions that combine low- and high-intensity conflict in various parts of the world. “We have to start using live, virtual and constructive [training] for combined arms maneuver, and additionally to be regionally capable,” Odierno says.
The first attempt at applying LVC is happening at Fort Hood, Texas, where the 2nd Brigade Combat Team of the 1st Cavalry Division is testing an “integrated training environment.” Odierno says the Army is only doing this as a “pilot” program because it still has no idea how much it will cost to install at every training center.
The combination of multiple Army weapon simulators already exists in systems used to train tank and helicopter crews. The Army is looking to expand the concept to cover the entire force.
The upshot for contractors is that they need to keep investing in new technology, says Colabatistto.
Companies should try to anticipate customers’ needs and develop forward-thinking technology before the military decides what it wants to buy, he says.
CAE is pouring corporate research-and-development funds into high-tech displays, motion systems and image generation technology, he says. “We tend to make the heaviest investment in content,” which is what makes simulations feel real to the trainee. The military is a demanding consumer, he says. “They want mission-based training. … You have to make the environment immersive.”
As to how much money the military ultimately could save by trading live flying hours for training in simulators, the jury is still out. The Government Accountability Office challenged the Air Force’s $1.7 billion future savings projection, pointing out that the estimate does not include the upfront cost of buying simulators and providing technical support.
“The Air Force included the savings associated with reductions in live training but not the potential costs associated with increases in virtual training,” says a GAO report published in July.
The live training cost of one F-15E flight hour, for instance, is about $17,449, and the plan would be to cut 1,782 hours from future training and save $31 million. Similar calculations were made for each of the Air Force’s fleets. The problem, GAO argues, is that the Air Force has not “developed a methodology to collect and track information on the cost of its virtual training program.”
These costs could include expenses for aircrew to travel to simulator locations, additional contractor personnel to schedule and operate simulators, and the purchase of additional simulators to meet increased demand, the report says. “According to Air Force officials, identifying virtual training costs is challenging because funds to support virtual training and distributed mission operations are dispersed across multiple program elements.”
GAO auditors reviewed a 2011 Air Force study that pegged total expenditures on virtual training in fiscal year 2012 at $1.9 billion. But the study acknowledged that not all costs had been captured, the GAO report says. “Without a means to collect or calculate its virtual training costs, the Air Force lacks the information it needs to make informed investment decisions in the future regarding the mix of live and virtual training.”
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