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Worst may be over for Singapore's aerospace industry as businesses start hiring again

Worst may be over for Singapore's aerospace industry as businesses start hiring again

Planes parked at Changi Airport on Jul 2, 2020. (File photo: iStock)

SINGAPORE: After being pummelled by the COVID-19 pandemic, Singapore’s aerospace industry is slowly getting back on its feet with businesses looking to hire again.

Industry players said the worst may be over as travel resumes in some parts of the world and vaccine roll-outs continue to make progress, although they also cautioned of a bumpy route to recovery.

Earlier this week, Manpower Minister Tan See Leng announced at an industry event that aerospace companies in Singapore are looking to recruit 1,000 people over the next two years

Among them include American aerospace manufacturer Pratt & Whitney, which is planning to add 250 more employees to its maintenance, repair and overhaul (MRO) operations in Singapore by the end of this year.

Aircraft engine and component provider GE Aviation is also hiring for 200 positions. 

Both multinational firms have said they will continue to grow their workforce in Singapore in 2022, alongside the expected recovery of their industry.

Singapore Technologies (ST) Engineering plans to hire up to 200 people by next year for full-time roles like aircraft technicians, production planners, materials inspectors, aircraft engineers and data analysts.

Over at Singapore Aero Engine Services (SAESL) – a joint venture between SIA Engineering and Rolls-Royce – 100 more technicians and 70 trainees are needed.

Recruitment has started about four months ago and the company expects these roles to be filled progressively through the rest of this year and into early 2022.

In addition, SAESL foresees “at least another 100 (new hires) a year for the next two or three years", in line with the industry's recovery, according to chief executive Simon Middlebrough.

SIGNS OF RECOVERY

Singapore is one of the world’s leading aerospace MRO hubs, accounting for 10 per cent of global MRO output and employing more than 22,000 people.

But with airlines dramatically slashing flight schedules and planes grounded amid travel restrictions, the industry, which predominantly supports commercial aviation, suffered a heavy blow. Several companies, including Pratt & Whitney, Airbus and Rolls-Royce, laid off hundreds of workers in Singapore last year.

There are "signs of recovery", said the Association of Aerospace Industries (Singapore).

“The global airline industry is making progress from the deep losses suffered since last year, and should turn the corner into positive territory by 2023. The expectations for air cargo and passenger traffic are optimistic, with air cargo already above pre-COVID levels,” the association's chief executive Sia Kheng Yok told CNA.

Singapore's recent move to expand vaccinated travel lanes to 11 countries has also raised hopes, he added, noting that there “appears to be pent-up demand” among travellers.

The aerospace maintenance and manufacturing industry in Singapore serves a global market, which is also seeing signs of recovery with the restoration of domestic air travel in China, Europe and the United States.

Citing official data that showed industry output rising 22 per cent in August from a year ago, as well as the hiring spree by companies, Mr Sia said: “While we can expect a bumpy ride ahead, the worst does seem to be over for aviation and aerospace.”

COMPANIES FORGING AHEAD

Mr Iain Rodger, managing director of GE Aviation in Singapore, said the company is seeing a continued recovery of the aviation sector as countries open up their borders progressively.

“We are experiencing positive growth in the second half of 2021 and we are optimistic about 2022, as the industry continues its multi-year recovery,” he said.

Over at ST Engineering, its commercial aerospace business secured new contracts worth about S$874 million in the second quarter of this year. These included passenger-to-freighter conversion orders and MRO contracts.

“While we have indeed seen a number of major RFPs (request for proposals) and new orders as some airlines renew their existing contracts and as flying activities slowly pick up, most of the maintenance activities are still in support of domestic travel and freighters, which saw increased demand during the pandemic,” said the firm's commercial aerospace president Jeffrey Lam.

“However, we believe that the market has bottomed and is on a gradual recovery trajectory.” 

ST Engineering said it remains “very positive” about the industry’s growth and prospects, and will continue to build up its MRO capabilities in airframe, component and engine.

It will also continue to grow its passenger-to-freighter conversion business – an opportunity it seized last year by repurposing under-utilised A321 passenger aircraft into freighters for air cargo.

This has been a bright spot for the firm amid the downturn, and continues to see strong demand due to a booming e-commerce industry, said Mr Lam. Already it has set up a freighter leasing joint venture with Temasek in August last year.

“Through this new venture, we will address the growing demand for freighter aircraft as e-commerce and air cargo volumes expand across the globe, while at the same time leverage our deep technical expertise to provide end-to-end solutions including entry to service, deployment and maintenance,” Mr Lam added.

SAESL’s Mr Middlebrough said the aerospace industry “is a very difficult beast to predict as a whole” but he sees certain geographies and market segments making quicker recoveries.

For instance, short-haul domestic and regional travel will likely make a comeback before international long-haul flights. With that, narrow-body jets are likely to see greater demand.

Airlines are also more likely to bring their most cost-effective, fuel-efficient and sustainable aircraft back into service first.

SAESL stands to benefit from these trends. “I service Rolls-Royce engines and Rolls-Royce engines are favourably skewed towards that new end of the life cycle,” said the chief executive.

That said, industry players are well aware of the turbulence ahead with the continued spread of the more infectious Delta variant.

“Don't get me wrong, I think there will still be bumps in the road over the next six to 12 months but we have to start planning for the macro recovery now ,” said Mr Middlebrough.

Airbus said although there are clear signs of recovery in most regions, it does not expect a return to pre-pandemic levels until 2023 at the earliest.

This is because with MRO services severely impacted due to the grounding of fleets, a “meaningful recovery in the sector will only come” with the return to service of these aircraft.

Mr Anand Stanley, Airbus’ president for Asia-Pacific, added: “Until there is a general acceptance of this fact (that COVID-19 needs to be seen as an endemic) and a meaningful reopening of borders without restrictive quarantines, the aviation sector in the region will continue to lag recovery elsewhere.”

Nonetheless, the company said it is “fully committed to its presence in Singapore” which serves as its regional hub.

“When the airline market in the region recovers, we will review our plans for the future, which will include growing further our presence in Singapore,” Mr Stanley added in an emailed response to CNA.

NEW OPPORTUNITIES, TALENT

Manpower Minister Dr Tan also said in his speech the industry can seize growth opportunities in digital services, autonomous technologies and sustainability moving forward.

Commenting on that, Mr Sia said the downturn has accelerated the pace of digital transformation for aviation and aerospace, with the industry rolling out new digital services to airlines and drawing on data science, artificial intelligence and machine learning to develop better solutions.

There is also a push towards the development of autonomous capabilities for ground operations at airports and to assist flight operations. One example is the proliferation of air taxi concepts that are designed for autonomous operations. 

Meanwhile, the industry is working on a “green recovery” given rising concerns about the impact of air travel on climate change.

For instance, sustainable technologies like sustainable aviation fuel, electric and hydrogen propulsion are a priority agenda for aircraft manufacturers. The Association of Aerospace Industries also launched an inaugural report recently on the adoption of solar energy by aerospace companies in Singapore.

“These changes herald a brave new post-pandemic future for the aviation and aerospace industry. The Singapore workforce and businesses will need to adapt and thrive in this environment,” Mr Sia said.

On ensuring a ready talent pool, the association said it will continue to play its role as "an interlocutor" between industry, government agencies, and the institutes of higher learning.

“We are currently studying the key role that talent will play in the industry’s recovery and are exploring ideas to prepare Singaporeans for the future shape of the industry,” said Mr Sia.

Businesses said they are already investing in these areas.

For instance, Thales told CNA in an emailed interview in September that with the pandemic accelerating the rate of digital transformation for many sectors, it had also picked up the pace on this by investing in digital tools and infrastructure to streamline and shorten its internal processes.

"We leverage the Thales Digital Factory in Singapore – taking a scrum approach and working with agile teams to identify areas of improvements within our processes – so we have higher efficiency and optimised outputs," said Mr Francois Piolet, vice-president and general manager of Aviation Global Services for APAC and China.

Mr Rodger from GE Aviation said the company continues to invest in its people to develop their skills in current and future technologies.

"We are also seeking to grow our talent and technicians in all areas such as machining, welding and coating as well as engineers for new and emerging technologies.”

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Source: CNA/sk(cy)

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