Fewer commercial planes flying means fewer aircraft needing maintenance and repair, so it’s no surprise Covid-19 is having a knock-on effect on the aerospace industry.
About 85% of Singapore’s aerospace industry is involved in maintaining and repairing aircraft, and local companies also play a “small but critical” role in the global supply chain, said the Association of Aerospace Industries (AAIS), Channel News Asia reported.
“Today, more than 60 percent of the global aircraft fleet has been grounded by the pandemic,” the association said. “As Singapore has 10 percent of the global maintenance market share, this has resulted in a direct impact on aerospace businesses here.”
Parts manufacturers and suppliers here have also suffered, after Boeing and Airbus cut production in the United States and Europe, CNA reported.
“Made-in-Singapore aircraft engines, engine cases, fan blades, avionics and electrical systems are installed in many new Boeing and Airbus aircraft,” AAIS said, pointing to the “key role” played by small and medium enterprises in Singapore for services such as maintenance, repair, overhaul and manufacturing.
According to figures from the Economic Development Board, Singapore’s aerospace sector employs more than 22,000 people, with the industry’s output surpassing S$11 billion in 2018, CNA reported.
SIA Engineering — the maintenance, repair and overhaul (MRO) arm of Singapore Airlines — said there has been an immediate impact on its line maintenance unit, noting the 50 per cent drop in the number of flights it handed at Changi Airport in March.
“An extended period of flight restrictions will also have consequent impact on our other businesses,” it said.
During its annual general meeting, ST Engineering said it expects a slowdown in its aerospace unit due to MRO services being deferred, as well as original equipment production rates being lowered, CNA reported.
Collins Aerospace, which just three months ago opened a 10,000 sq ft innovation hub in Singapore, said it is “monitoring the evolving market conditions very closely.”
Rolls-Royce, which has a facility in Singapore that assembles and tests Trent aero engines, said operations have been scaled down, CNA reported.
“We are still continuing our operations to meet the production deliveries in our civil aerospace business, though operations have been scaled down in line with revised demands and the circuit breaker requirements,” said Dr Bicky Bhangu, Rolls-Royce’s president for Southeast Asia, Pacific and South Korea.
“MRO has slowed as planes are parked around the world, technicians are laid off or furloughed or shops have had to close because someone tested positive,” said Matthew Driskill, editor for industry publication Asian Aviation.
Meanwhile, original equipment manufacturers such as Boeing and Airbus are trying to survive by “saving cash, reducing production (and) raising money if they have to,” he said, pointing to Boeing’s US$25 billion bond sale last month, CNA reported.
Dr Bhangu said he believes that the aviation industry will recover from its significant downturn. He noted that Rolls-Royce’s defence and power systems businesses, which service military industrial and civil markets, are helping support the firm during the aviation sector’s downturn.
“Our focus is on the longer-term – we will continue to invest in digitalization, automation and smart manufacturing technologies, which we believe will put us in good stead for the new normal post-pandemic,” he said.