Singapore Cushions MRO Sector

SIA Engineering (SIAEC) has described the MRO outlook as “challenging” with no clear sign of a significant pick-up in flight frequencies.

Unlike Chinese airlines, which are staging a cautious recovery since their worst days in February, Singapore Airlines has no domestic network to fall back on, and so has been devastated by international travel restrictions.

However, it has raised a huge war chest of roughly $8 billion in fresh liquidity to weather the crisis, which should guarantee the future of its maintenance arm.

For now, though, the pain is significant. SIAEC reported an 87% fall in flights handled by its line maintenance team at Changi Airport in the first quarter.

“At our Singapore base, the number of flights handled in the quarter was only about 13% of what we used to handle pre-COVID-19. Our base maintenance unit had fewer airframe overhaul checks while airline customers under our fleet management business saw significant reduction in flying hours,” the company stated.

Revenue for the three months to 30 June more than halved to S$118 million, although Singapore government support schemes helped cushion the company, which posted an S$11 million profit for the quarter.

This was 74% lower than the prior-year period, although SIAEC said its net loss would have been S$37 million without the help of a state jobs support scheme. The MRO provider performed 15 heavy checks in the quarter, five fewer than a year earlier.

To reduce its outgoings, SIAEC has cut wages, furloughed staff and deferred capital expenditure, as well as shutting down lines with low activity. In some cases it has redeployed staff to more in-demand tasks like aircraft disinfection and preservation maintenance.

Alex Derber

Alex Derber, a UK-based aviation journalist, is editor of the Engine Yearbook and a contributor to Aviation Week and Inside MRO.