CAE Inc. chief executive officer Robert Brown wants to take the flight simulator maker beyond aerospace, launching a research program that could yield innovative products, such as computer-generated disaster scenes, to help train emergency workers.

Mr. Brown said Tuesday that the six-year joint initiative with the federal government, called Project Phoenix, is important to maintain CAE's competitive edge.

“In any company, you have to keep a real close eye on your customer and make sure you're providing a good-quality product that's reliable. You have to continue to innovate. We're looking at all aspects of our business to stay ahead of the curve,” he said in an interview, stressing that developing new products is a key element of CAE's corporate culture.

Aerospace-related improvements will be the primary focus of Project Phoenix, possibly accounting for 80 per cent of the joint venture's $630-million in spending, but there also will be studies into other potential simulators in civilian and military markets, Mr. Brown said.

While he cautioned that he didn't want to reveal too many details, for fear of tipping off competitors, he said CAE has the expertise to develop products that could help an array of people, ranging from emergency response staff on city streets to soldiers in the battlefield.

“Anywhere there's large computing power where you're using simulation and training is potentially an application. But our core competency and capability will remain in the aerospace area,” notably with building flight simulators and training pilots, Mr. Brown said.

The company reported a $17.6-million profit or 7 cents a share in its third quarter ended Dec. 31, exceeding analysts' expectations.

The results are a major reversal of fortunes from the same quarter in 2004, when Montreal-based CAE wrote down the value of some key assets and lost $347-million or $1.40 a share. Revenue climbed 7.4 per cent to $276.6-million as the order book strengthened, including sales in places such as Saudi Arabia, China and India.

Mr. Brown, who resigned as CEO of troubled aircraft maker Bombardier Inc. in late 2002, took over the top job at CAE in August, 2004. He replaced the retiring Derek Burney, a former Canadian ambassador to Washington who recently headed up Prime Minister Stephen Harper's transition team.

CAE shares have jumped 64 per cent since his arrival and the implementation of a restructuring plan last year that included cutting 450 jobs, or 8 per cent of worldwide staff. CAE also has streamlined its manufacturing. For instance, an Airbus A320 full-flight simulator now takes 14 months to build, compared with 20 months previously.

“We are now doing more with fewer people at a lower cost,” Mr. Brown said in a conference call with analysts.

CAE shares rose 26 cents to $9.43 on the Toronto Stock Exchange Tuesday. Since the terrorist attacks on the United States on Sept. 11, 2001, CAE has sought to regain the confidence of investors, who fretted about a slump in demand for pilot training and flight simulators.

In mid-2001, CAE shares hit a record high of $15.45, but tumbled below $3 in the spring of 2003.