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SINGAPORE : Changing trends in the commercial aviation industry are creating opportunities for third party firms like ST Aerospace.
They are gearing up to the challenge by expanding their business and recruiting more talent - even in the face of dampened global economic conditions.
Air travellers are not the only ones benefiting from the spurt of budget carriers in the region.
Low cost airlines tend to be very lean organisations - which means their maintenance, overhaul and repair needs are often out-sourced. For third party companies like ST Aerospace, this translates into greater business opportunities.
Ho Yuen Sang, Deputy President (Operations) and COO, ST Aerospace, said: "... in SEA or other parts, the rise of low cost carriers has been a significant development. People like Air Asia, Jetstar, even in the US there is Skybus - how they run the airlines will depend on how we serve them.
"For example now they are very lean. They need engineering resources, so we have to provide resources to help them. They outsource a lot - components, engine, airframe. So we must be there to provide these services at a competitive rate so as to meet the requirements."
Mr Ho noted that the bigger carriers, legacy airlines, are also now beginning to outsource. ST Aerospace now finds that it is having to face the happy problem of looking at how to expand its business to keep up with growing demand.
Mr Ho said: "Infrastructure development is not a big issue. I'm sure the company is rich enough to do that. But it's all the other issues that come with it - retaining talent, managing the business and all that. The issue is the global shortage of HR. Everyone's growing rapidly.
"(If) everybody continues their part on training new people then we're fine. But some startups are new, young, lack resources to do training. So they have to go to the market to get (them). And they put pressure on us. We spend a lot of money training, but hopefully we train for ourselves."
And despite the dampened outlook for the US, ST Aerospace is positive of its outlook. Other than passenger carriers, it also services cargo airlines.
Mr Ho said: "As long as aircraft flies, we have business. Whether it flies with 100 per cent or 80 per cent load factor, it doesn't really affect us. We're lucky we have different customer base. We have cargo, passenger.
"For example, during SARS a lot of passenger airline was affected. But when passenger airlines stop flying, they can't carry cargo also. So cargo airlines' having boom time. And we serve the cargo airlines, so we somehow balance off."
ST Aerospace is the aerospace arm of ST Engineering, which is also looking at more areas to expand in.
Patrick Choy, Executive Vice President, International Marketing, ST Engineering, said: "Looking at the landscape going forward, perhaps the defence budget will be reduced, therefore how do you react to changing trends?
"The company has already started looking at how to use our technology, enabling technology, not just for one-dimensional application, but to see how we can use this technology to also serve society at large, other communities. For example, we are talking about humanitarian, how can we have a role, be relevant towards this disaster relief operations taking place all over."
ST Engineering is working with Kazahkstan's education ministry to equip schools in the country with multi-lingual labs.
The company is acutely aware of its size relative to the major companies across the world.
Mr Choy said: "For the size of this company, we are not really in the league of some of the big ones, like Boeing all that. So ST Engineering would want to select the playing field that we have a competitive edge. We focus on niche areas that bring us best returns."
ST Engineering is picking out specialisations across its four business sectors - aerospace, marine, land and electronics. - CNA/ch
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