SIA Engineering (SIAEC) remains optimistic about “healthy” air travel demand in the near-term, as it sees opportunities in ongoing aircraft delivery delays.
The MRO unit of flag carrier Singapore Airlines notes that the delays have resulted in airlines “keeping older aircraft in operation and needing MRO support for those aircraft”.
However, it stresses that supply chain constraints continue to linger in the MRO sector, leading to extended aircraft maintenance times, and consequently a lower volume of checks.
“[The] industry continues to face pressures from supply chain constraints, rising costs, tight manpower supply and heightened geopolitical tensions. Likewise, [SIAEC] is contending with similar challenges, particularly supply chain issues and elevated costs,” the company states.
Its outlook comes as the company significantly improved its earnings for the six months ended 30 September. SIAEC saw a three-fold jump in its operating profit to S$3.4 million ($2.56 million) for the period.
This was on the back of a 12.1% increase in revenue to S$576 million, which outpaced an 11.5% rise in costs to about S$572 million.
SIAEC says its line maintenance unit handled 9% more flights in its Singapore headquarters, and notes similar increases in other units elsewhere.
However, its base maintenance division reported a drop in the number of checks, and this was due to “a higher mix of legacy aircraft checks with heavier work content as well as cabin refurbishments”.
SIAEC adds: “The duration of some aircraft checks was also extended because of supply chain constraints that led to longer lead times to obtain relevant aircraft spares.”
As for the rise in operating costs, the MRO provider states that it recorded higher material, manpower and repair costs. This was compounded by exchange losses during the half-year.
