SINGAPORE—Government measures and an increase in traffic at Changi Airport (SIN) helped Singapore Airlines Engineering Company (SIAEC) return to profit during the first quarter of its fiscal 2021/22.
The MRO provider achieved a net profit of S$14.5 million ($11 million) for the three-month period ending June 30.
However, SIAEC warned that the outlook for the sector remains uncertain and rests on vaccination rates and the reopening of borders. Air traffic at SIN in the quarter improved 97% year-on-year (YOY), but compared to the first three months of the year the quarter-on-quarter increase was a more modest 13%.
Line maintenance services doubled YOY from 4,952 flight to 9,755 flights in fiscal Q1 2021/22. Light and heavy checks both saw marginal increases, mostly thanks to “active marketing efforts.” As a result, SIAEC achieved S$125.3 million in revenue, improving 5.7% YOY. Profits from overseas ventures were also up 8% YOY to S$14.8 million.
After cost-cutting and redundancy measures in 2020, total expenses came in at S$128.2 million, edging 0.9% higher YOY.
The Singapore government’s Job Support Scheme (JSS) measures have been lowered in 2021. JSS was reduced to subsidizing 30% of wages between April and June 2021 and is now at 10% as of the start of July. At the onset of the pandemic JSS stood at 75% and then stood at 50% between September 2020 and March 2021. SIAEC said without the JSS, the company would have recorded a S$24.1 million loss in fiscal Q1.
Looking ahead, SIAEC is maintaining a cautious approach in its outlook as infections have surged once again in the region.
“The uptick in flight volume from home-based carriers has been encouraging but any meaningful increase in flight frequencies is not expected to materialize in the short term,” the company stated in its fiscal Q1 release. SIAEC added that it will focus on its digital transformation efforts and reshaping its portfolio to “build new capabilities for existing and new generation aircraft and components amidst a changing business environment.”
