Ready for Takeoff: Singapore’s MRO Industry Soars to New Heights | Tractus

With its strategic location and position as one of Southeast Asia’s economic powerhouses, Singapore has transformed into the region’s busiest air transit and air freight center, as well as one of its pre-eminent aerospace and maintenance, repair, and overhaul (MRO) hubs.

With over 5,600 flights linking the island nation to 143 destinations globally, Singapore’s Changi International Airport, Asia’s busiest, serves about 50 million passengers per year.  With plans to add another terminal by 2024, it expects passenger capacity to increase to a total of 65 million per year – making it a destination of choice for MRO services needed by airlines.

The MRO industry in Singapore reached a value of US$739 million in 2021 and is projected to grow by 1.2% per annum. According to the Ministry of Trade and Industry (MTI), the industry’s monthly index of industrial production has exceeded pre-COVID levels and grew 27.7% year-on-year in 2022. This growth rate is driven by an increase in the value of aircrafts, the number of new aircraft deliveries, and the total number of aircraft movements.

To carve out its position as a regional MRO nerve center, Singapore is setting the stage by creating an Industry Transformation Map for aerospace from 2022 till 2025, with the aim of adding $4.6 billion in added market value by that year. This involves building as innovative an aerospace ecosystem as possible. It is accomplishing this by providing players from across the MRO value chain with the right infrastructure, focusing on innovation, establishing a talent pipeline and providing access to a large addressable market at its doorstep from Changi airport.

Singapore’s MRO Ecosystem and Infrastructure

Singapore is home to several major MRO operators and aerospace companies that offer a wide range of services, including SIA Engineering Company (Singapore Airlines’ MRO subsidiary), ST Engineering Aerospace, Pratt & Whitney, Rolls Royce, Liebherr, and several others. This collection of aerospace players has created an ecosystem that covers a wide range of MRO services, including airframe maintenance, engine overhaul, component repair, and other specialized services such as avionics maintenance, cabin interior restoration, and painting. Singapore has also become a center for aircraft modifications and conversions, with various companies providing services such as cargo conversions and passenger-to-freighter conversions.

According to the Association of Aerospace Industries of Singapore (AAIS), there are a total of 130 aerospace players in Singapore. The JTC Seletar Aerospace Park is the focal point of Singapore’s aerospace and MRO industry and is home to a thriving cluster of more than 60 multinational and local businesses. Government agencies, research institutions, and private corporations have established several initiatives and programs to foster innovation and growth in the MRO industry, as well as to attract new players, such as Liebherr, which has expanded their in-house repair capabilities for hydraulic and heat transfer equipment as well as training programs for employees. AeroSpace Three, the most recent development at Seletar Aerospace Park, will support these efforts by providing “plug & play” smart industrial solutions for manufacturing and MRO operations.

Similarly, A*STAR, Rolls-Royce, and Singapore Aero Engine Services Private Limited (SAESL) have established a smart manufacturing program to develop MRO capabilities for the next generation. To date, more than a hundred small and medium-sized businesses (SME) have participated in this joint lab, with some becoming qualified suppliers for global aerospace companies.

Singapore is also well-positioned to train qualified labor for the aerospace sector given the presence of high-quality institutes and industry-academic partnerships. The government has actively invested in training programs to assist the aerospace industry, and as a result, the country has established a strong reputation as a training hub. Every year, over 2000 graduates from aerospace courses at ITE, polytechnics, and universities graduate as certified technicians and engineers. According to Singapore’s Ministry of Trade and Industry in February 2023, Singapore’s MRO industry will be looking to recruit for 3000 jobs this year.

Through the Industry Transformation Map 2025, the Singapore Government is expecting different institutions and agencies to collaborate with aerospace firms to develop and deploy technologies such as advanced robotics and Industry 4.0. The objective of the transformation map, which will inevitably open up opportunities for different MRO players, is to increase the efficiency of local MRO operations, enabling progress up the value chain and maintaining competitiveness.

Long-Term Outlook

In the years to come, international MRO players in Singapore can look to three key areas for growth, collaboration, and investment:

1. Digital/Hi-Tech Services and Predictive Maintenance

As the industry continues to expand rapidly, MRO service providers must keep up with new digital technologies in order to meet the changing needs of their customers. Previously, MRO providers merely had to ensure that their services were available 24/7. But now, MRO providers must also maintain digital equipment, such as aircraft sensors and avionics systems, and be able to provide ‘predictive maintenance’ services to catch aircraft MRO requirements well before issues occur. The potential for digital services in this sector is significant as big data can be utilized by the aerospace industry to monitor aircraft health, future maintenance needs, optimize fuel usage, and eliminate on-ground delays. One example of this is how Air France KLM Engineering & Maintenance has combined its MRO expertise with that of Sabena Technics to form Singapore Component Solutions (SCS), a joint venture that leverages predictive maintenance capabilities with its ability to provide repairs and workshops across the region and enhance client performance.

As a statement of confidence in the growth of digital services in the MRO segment, Airbus stayed ahead of the curve and inaugurated a $38 million Singapore Campus at the Seletar Aerospace Park in November 2021. The campus houses a team devoted to the company’s digital solutions platform, Skywise, and serves as the regional hub for the business.

The usage of AI as part of aircraft maintenance is also gathering pace. The Civil Aviation Authority of Singapore (CAAS), A*Star’s Smart Automated Aircraft Visual Inspection System (SAAVIS), and ST Engineering, via its DroScan program, are exploring drones and robotics along with new algorithms for aircraft inspections in order to get more accurate insights on defects compared to manual checks.

2. Training Requirements in MRO

Singapore provides a variety of MRO training programs, such as fundamental maintenance training for mechanics and technicians, specialized training for specific aircraft and equipment, and advanced training in avionics, composites, and engine maintenance. The Singapore Institute of Aerospace Engineers, the Singapore Aviation Academy, and corporations including SIA Engineering Company and ST Aerospace are among the institutions and organizations that offer training programs. These programs are intended to meet the requirements of local and regional industry professionals and contribute to the skilled labor force of the aerospace industry.

However, while Singapore has a strong pipeline of talent in data analytics and related fields, more specialized expertise is needed in areas such as predictive maintenance, digital solutions, and sustainability, specific to the aerospace industry.

Another area of opportunity lies in Singapore’s position as a regional aerospace training center for MRO. Training partnerships with Malaysia and Indonesia and other Asian markets draws students and aerospace personnel to Singapore to enhance their skills – an opportunity for international training organizations in MRO to consider.

3. Sustainability in MRO

The Singapore government has established a number of programs to promote sustainable practices in the aviation industry, such as the Sustainable Aviation Fuel Initiative and the Green Plan 2030, which aims to promote sustainability across industries, including aerospace/aviation, and encourage MRO companies to consider alternative fuels and energy sources, hybrid engines for ground support equipment, and other sustainable materials to further reduce their carbon footprints. The cost of jet fuel, which historically accounted for nearly a quarter of total operating expenses, is also a key driver behind the growing emphasis on sustainable aviation fuels

As a result, companies such as Singapore Airlines Engineering Company (SIAEC) and the Republic of Singapore Air Force (RSAF) are working on various strategies to reduce fuel consumption and related cost. This includes implementing more efficient engine designs, optimizing flight paths and air traffic control, reducing aircraft weight, and improving maintenance practices to ensure aircraft are operating at peak efficiency.

The Path Forward

By 2030, the international MRO market is expected to grow to $200 billion, and Singapore is already at the forefront of innovation in this segment, contributing to 10% of global MRO output. The stage is set for Singapore to strengthen its status as an “aerospace city” and for international MRO companies from across the value chain to explore the opportunities Singapore presents as a launchpad to the wider ASEAN region.

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Authored by

Written by Pei Wen, Senior Analyst based in the Singapore office; and Udai Panicker Tractus’ Singapore Country Manager.