MONTREAL - An upsurge in civil aviation in China and India is opening up opportunities for Montreal's CAE Inc. -- the global leader in flight simulators -- as Asian airlines struggle to overcome a critical shortage of pilots.

But CAE's high-tech rivals in the simulation products and training field are quickly adding muscle and preparing to exploit the Asian airlines' need for pilots.

The numbers tell the story.

China's airlines will need to train nearly 12,000 new pilots by 2010 to keep the aircraft they have ordered in the air and meet international safety standards.

Boeing's training unit projects China's needs will soar to 34,000 pilots through 2024.

India, with a fast-growing economy and almost as many people as China's 1.3 billion, is following behind and adding pressure to the pilot shortage.

It has serious airport infrastructure problems, but deregulation has opened the domestic skies to several new low-cost airlines.

CAE, hit hard by the post-9/11 civil aviation slump and restructured over the past 18 months by chief executive officer Robert Brown, has dominated the Asian commercial simulator and flight training market for more than 25 years.

Overall, it holds a 75 per cent world market share.

"Airline orders and deliveries drive the simulator market everywhere and we know competition may stiffen in Asia," said Marc Parent, the former Bombardier Aerospace executive who became president of CAE's simulation products group early last year. "We meet Europe's Thales, our main simulator competitor, at almost every step wherever we go and Alteon, Boeing's flight training unit, as well as many smaller firms."

But CAE -- which has a total payroll of 4,800 worldwide, including 2,800 engineers, software researchers and technicians in Montreal -- believes it can compete best by controlling costs and maintaining its technological lead and credibility with the big airlines, Mr. Parent said.

"We can now build a simulator in 14 months, down from 18 months before, and we've sold non-core businesses. We've rationalized manufacturing in Montreal and our worldwide simulation and training services network. The market is fluid, but we're going after profitable business in Asia and elsewhere ... market share is secondary."

CAE delivered 21 full simulators in its fiscal year ended March 31, and analysts say it could hit 25 or more in fiscal 2007.

By comparison, world deliveries should almost double to 60 or more in three years. Full simulators cost $10 million to $15 million U.S. each, but CAE also sells visual devices and operates pilot training centres with 100 simulators worldwide.

It has counted Air India and Indian Airlines among its clients for many years and will pick up more business with the new discount airlines, Mr. Parent said.

It also has about 40 people in India providing computer services.

"The last civil aircraft cycle was freakish and peaked just before the 9/11 terrorist attack," he said. "This time, the cycle should be much longer and persistent. The strapped U.S. legacy carriers should join the party in a year or two and Europe will improve, but Asia will be the driving force all along as wealth spreads and people leave trains for planes."