Why It Matters

Still room to soar in aerospace

It is a tough time for Singapore's aerospace sector.

From a high of $8.7 billion in 2012 and 2013, total output fell to $8.3 billion in 2014 and an estimated $8.1 billion last year. One reason for the slowdown is that airlines are flying newer planes, such as the Airbus 350 and Boeing 787, which do not need many repairs in the first few years of operations.

The local aerospace sector, which is focused mainly on aircraft maintenance and repair, is key to Singapore's overall economy. With more than 100 aerospace companies based here, Singapore now accounts for about a quarter of the Asian aircraft maintenance, repair and overhaul market.

Key players include home-grown firms such as ST Aerospace and SIA Engineering, as well as global names such as Pratt & Whitney and Rolls-Royce.

Even as the current lull is hitting the industry, companies should take the opportunity to prepare for the upturn, which is expected in a couple of years. Improving processes, through innovation and technology, will be critical to achieving productivity and bottom-line gains. This is especially so with manpower costs on the rise amid a labour crunch.

US engine-maker Pratt & Whitney, for example, has replaced manual checks of components using a handheld probe with an automated system which has cut inspection time by 40 per cent and raised capacity by 300 per cent. At Changi Airport, where ground-handling firm Sats prepares airline food, robotic arms are now used to assemble meal trays - a task previously performed entirely by humans.

In harnessing technology, it is essential to ensure workers gain the capabilities needed to handle not just the new processes but also more advanced materials used to build new planes and parts.

Despite current challenges facing not just aerospace firms but airlines as well, the demand for air travel in the Asia-Pacific is expected to grow strongly in the middle to long term.

This will create new opportunities for those prepared to invest and upgrade for the future.

A version of this article appeared in the print edition of The Straits Times on December 27, 2016, with the headline 'Still room to soar in aerospace'. Print Edition | Subscribe