SIA Engineering Company Continues Digitalization; Posts $5.8M Q3 Profit
SINGAPORE—The Singapore Airlines Engineering Company (SIAEC) is taking the downturn of the MRO market to push ahead with the second phase of digitalization transformation efforts that began in 2017.
The move comes as the company posted a marginal net profit of S$7.7 million ($5.8 million) for its 2020/21 fiscal third quarter (Q3). SIAEC is reporting a net loss of S$11.3 million over the nine months ending Dec. 31, 2020.
Around S$40 million will be invested over the next three years, enabling the introduction of tools such as an engine lifter that will reduce time and manpower required for an engine change. Another tool, the SMART-MX system, will allow line maintenance engineers to access information and decision support, such as aircraft defect history, maintenance manuals and tool location. The investment will also be used to “reskill and upskill” SIAEC’s employees to increase competency and adaptability.
Gradual recovery of air travel saw a 3.3% month-on-month uptick in line maintenance during the quarter, still at 19.3% of 2019 levels. Reduced flying hours translated to less heavy checks, most being light checks. SIAEC carried out 53 light checks in Q3 2020/21, compared to 138 in Q3 2019/2020.
Revenue declined 58.5% year-on-year (YOY) from S$252.1 million to S$104.6 million in Q3 2020/21, or a cumulative S$327.6 million over the nine months period.
In addition, it spent S$11.8 million on an investment in the Pratt & Whitney PW1200G engine program.
SIAEC’s overheads was significantly cushioned by the government’s job support scheme (JSS), which subsidizes 75% of employee wages. The company said without the support it would have incurred losses of S$44.7 million. The company said it will observe closely as the government draw down of subsidies from 75% to 50% commences in March. Other manpower cost savings will necessitate the release of contract staff, including staff under voluntary no-pay leave and early retirement, salary cuts and furlough.
“We will continue to closely review the rationalization of our portfolio of joint ventures and subsidiaries in the current environment, and concurrently explore new investment opportunities for capability expansion,” SIAEC said.