Extending our Horizons - Singapore Technologies Engineering

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Flying High through Total SupportSingapore Technologies Aerospace (ST Aerospace), theGroup’s aerospace arm, is a leading third party aviationmaintenance and engineering specialist.With almost three decades of supporting the Republicof Singapore Air Force (RSAF), ST Aerospace isthe strategic partner of the RSAF and has beenmeeting their exacting requirements for leading edgetechnologies. Today, it has a global customer base,serving military air forces, commercial airlines andfreight carriers.Penetrating new marketsBacked by its span of capabilities, range of innovativesolutions and track record in turnaround time andquality work, ST Aerospace was able to capitaliseon new market opportunities. One such market wasthe emerging Low Cost Carriers (LCCs). Throughprogrammes such as Maintenance By the Hour (MBH)and Total Aviation Support (TAS), ST Aerospace offeredcomprehensive and flexible solutions that enhanced itscompetitive position in this segment, especially in Asia.In 2004, AirAsia awarded ST Aerospace a secondcontract of US$63.5m ($104m) for Maintenance, Repairand Overhaul (MRO) services for 10 of its aircraftpowered by CFM56-3 engines. Valuair was the sourceof another similar TAS contract. Jetstar Asia becameST Aerospace’s latest customer with a US$47m ($77m)contract for its fleet of A320s, which will grow toeight by 2005. The contract is for line, light and basemaintenance, engineering and technical services, aswell as components management and support.Expanding capabilitiesST Aerospace’s major facilities are located at Changi,Paya Lebar and Seletar airports, Singapore; Mobile andSan Antonio, USA; and Bournemouth and Stansted,UK. A new capability for commercial airframe MRO wasadded this year in the expanding Chinese market withthe establishment of Shanghai Technologies AerospaceCompany (STARCO) in Shanghai. STARCO, a jointventure with China Eastern Airlines, gives ST Aerospacean important foothold in China’s fast growingaviation sector.The Aircraft Maintenance & Modification (AMM) grouphas, since 2003, strengthened its repair capabilitiesfor all narrow and wide-bodied Airbus, Boeing andMcDonnell Douglas aircraft types, including the mostrecent A330, A340 and the B777. For military aircraft,ST Aerospace extended its capabilities to the F-16fighter aircraft and the Chinook helicopter. Thesecapabilities included airframe as well as enginesand components repair and overhaul. The companycan now service a wide range of military aircraftand helicopters.In 2004, in response to customer demands,ST Aerospace added three new hangars. Costingabout US$20m ($33m), they comprise two at STMobile Aerospace Engineering (MAE), USA, and oneat ST Aviation Services Co (SASCO), Singapore. STAerospace is also building two narrow-body slots at itsSeletar facility for ST Aerospace Engineering. These areexpected to be ready in early 2005. At the samefor US operators. This added to their difficultiesarising from falling revenues. Continued US dollarweakness may result in other complications; othercurrencies, including the Chinese yuan, may depegfrom the US dollar and revalue.The MRO industry was reported to have shrunk by14% from 2001 due to reduced flying hours, theretirement of maintenance intensive older aircraftand postponement of non obligatory maintenanceand modification work. Many MROs experienceddifficult times and some have ceased operations.Nevertheless, the industry still faces overcapacity,and further consolidation is possible.Legacy airlines are expected to continue torestructure their operations to focus on their corebusinesses and outsource their MRO work to reduceIndustry Review >>47TheEnterpriseInstinct
Aerospacetime, a wide-body aircraft hangar is being planned inSTARCO at Pudong Airport to complement the existingtwo hangars at Hongqiao Airport, Shanghai.On engine support, ST Aerospace further developedcapabilities for the B737CG, B737NG and the F-16.Service centre agreements were renewed with RollsRoyce for the repair and overhaul of the T56/501Dengines. New service centre status was also granted byHoneywell for the repair and overhaul of itsT55 engines.On non engine support, the Component/Engine Repair& Overhaul (CERO) group extended its capabilities forthe A320, A310/300, B777, B767, B757, B737NG,B737CG and MD-11 commercial aviation components,as well as added new capabilities for the F-16 andChinook military components. ST Aerospace receivedadditional authorisation from Original EquipmentManufacturers (OEMs), including Howell Instruments, forthe repair and overhaul of all its products in South EastAsia; Sargent Controls & Aerospace for its hydraulicvalves in Asia; and Parker Aerospace for the promotionand repair of its F-16 hydraulic pumps in Singapore.Notable service centre renewals included an agreementwith Eurocopter for the SA-330, AS-332 and AS-550helicopters in Asia.The Engineering & Materials Services (EMS) groupconsolidated its strengths in engineering expertise.It began development on variants of the B757Passenger To Freighter (PTF) conversion including a15 pallet configuration and marketing its 14 1 / 2 palletconfiguration on an approved Boeing SupplementalType Certificate.ST Aerospace’s Engineering and Development Centrecompleted Maintainability and Reliability Engineeringstudies that enabled customers to improve their fleetcost efficiency. This was an important service tocustomers, especially those on TAS programmes.>> Industry ReviewMRO Market Value & Forecast20012002200320042009$42.2$37.8$36.1$37.0$41.8operating costs. This is a business model the LCCshave adopted from the start.Strand Associates Inc, an aviation consulting firm,estimates that half of MRO work is now outsourcedcompared to one third 10 years ago, and expects abouttwo thirds to be outsourced by the end of the decade.Chart infomation and italicised text source: Overhaul and Maintenancemagazine, April 2004.2014$49.10 10 20 30 40 50US$ bLine Maintenance ComponentsEngineHMV & MODSSingaporeTechnologiesEngineering LtdAR 2004 48
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