SIA Engineering lifted by higher demand for its services

This comes amid robust travel, increasing use of existing planes due to delivery delays

- Ven Sreenivasan

Robust travel demand leading to a strong recovery in its core aviation engineering business, and increasing use of existing aircraft as new plane deliveries are delayed are just some of the factors which have been driving SIA Engineering Company's (SIAEC) revenue and earnings over the past year.

Little wonder that one detects a bit of a bounce in chief executive Chin Yau Seng's steps.

"Demand for our services is very strong, and is being largely driven by demand for air travel," he told The Straits Times in an exclusive interview.

He added that "delays in deliveries of new aircraft mean delays in retirement of older aircraft". "This essentially means more demand for maintenance, repair and overhaul (MRO) services."

For the year ended March 31, 2024 (FY2024), the company posted revenue of $1.09 billion, which was 37.5 per cent higher year on year. Its operating profit improved by $28.6 million year on year, from an operating loss of $26.3 million in FY2023 to an operating profit of $2.3 million in FY2024.

Core net profits for FY2024 surged 84 per cent year on year to $122 million, after excluding a $25.1 million write-off from its exit from a risk and revenue sharing programme to develop new aircraft engines with engine maker Pratt & Whitney.

It was the first year of profit at the operating level since the onset of the Covid-19 pandemic for a company that is one of the world's leading MRO specialists, servicing 80 airlines and aerospace equipment manufacturers worldwide.

In Singapore, the lion's share of its business is with its parent Singapore Airlines (SIA), which owns 78 per cent of SIAEC.

Mr Chin expects the company to continue enjoying robust growth this year, although this is not without challenges.