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CAE to invest C714 million dollars in research and development

Canadian Minister of Industry Tony Clement and Mr. Robert E. Brown, president and CEO of CAE in a CAE 7000 series simulator at CAE in Montreal. The Canadian government will invest up to 250 million dollars in CAE's research and development program, Project Falcon.

April 2, 2009, Montreal – CAE has announced that it will
invest up to C714 million dollars in Project Falcon, a research and
development (R&D) program that will span five years. The goal of
Project Falcon is to expand CAE's current modelling and simulation
technologies, develop new ones and increase its capabilities beyond
training into other areas of the aerospace and defence market, such as
analysis and operations.

The Government of Canada will participate in Project Falcon through a
repayable investment of up to 250 million dollars. This investment is being
made through the Strategic Aerospace and Defence Initiative (SADI),
which supports strategic industrial research and pre-competitive
development projects in the aerospace, defence, space and security
industries.

"Innovation is essential for CAE in order to sustain its leadership
position in modelling, simulation and training. We will therefore,
continue to invest in R&D, even in these challenging times," said
Robert E. Brown, President and Chief Executive Officer of CAE. "This
new Project Falcon will allow us to continue diversifying our revenue
base by leveraging our core technologies into adjacent segments."

Project Falcon will focus on applying investments into six main
technology thrusts. Among these will be the development of an augmented
visionics system-a technology enabling a pilot to take off and land
safely even when visibility outside the cockpit is restricted. CAE will
expand its research and development initiatives in its traditional
training markets, including simulation and modelling for new types of
aircraft, unmanned vehicles and replacement models for current
aircraft. CAE will also develop networking technologies to allow
defense forces of many nations to participate simultaneously in real
time training and mission rehearsal exercises.

Through the course of the program, approximately 1,000 jobs will be
created or maintained. CAE will carry out Project Falcon in Canada,
utilizing its R&D laboratories, and test and integration facilities
in Montreal. CAE's highly skilled workforce will continue to partner
with universities and key research organizations in Canada, as well as
innovative small and medium-sized suppliers across the country.

CAE is a world leader in providing simulation and modelling
technologies and integrated training solutions for the civil aviation
industry and defence forces around the globe. With annual revenues
exceeding C$1.4 billion, CAE employs approximately 7,000 people at more
than 75 sites and training locations in 20 countries. We have the
largest installed base of civil and military full-flight simulators and
training devices. Through our global network of 27 civil aviation and
military training centres, we train more than 75,000 crewmembers
yearly. We also offer modelling and simulation software to various
market segments and, through CAE's professional services division, we
assist customers with a wide range of simulation-based needs. www.cae.com.