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Biennial event opens amid roaring travel demand
THE biennial Singapore Airshow returns this week as the aviation industry gears up to ride on growing passenger traffic and disruptive technologies.
Aside from bringing together buyers and sellers, Asia's largest aerospace and defence event will also offer a platform for industry heavy-hitters, senior government officials and military chiefs to explore emerging trends and tackle some of the major headwinds facing the sector.
Stressing the growing importance of Asia, consulting director (aerospace & defence) at Frost & Sullivan Janesh Janardhanan, said: "The airline industry has done well in 2017 in terms of passenger traffic, which has a ripple effect on airports and the entire ecosystem. To keep up with passenger traffic over the next 20 years, approximately 14,000 new aircrafts are expected to be delivered in Asia, representing 42 per cent of global demand."
The International Air Transport Association projects that the world's airlines will clock a record profit of US$38.4 billion this year, thanks to buoyant demand and improved efficiency, while Asia-Pacific carriers are expected to rake in profits to the tune of US$9 billion.
The region is also gunning for a bigger slice of the maintenance, repair and overhaul (MRO) market, with Singapore already garnering about 10 per cent of global MRO business.
But while travel demand is on the rise in one of the world's fastest growing aviation markets - fuelled by strong economic growth and an expanding middle class - this may not translate into blockbuster orders at this week's event.
Centre for Aviation (CAPA) analyst Brendan Sobie said: "For airlines in this region, overcapacity is an issue, yields are low and competition is very intense. Suppliers participating in the Singapore Airshow this year have a better reason to be bullish about Asia than their airline customers from this region."
After the heady buying sprees of recent years, South-east Asia's carriers already have over 1,600 aircraft on order, almost as many as the nearly 2,000 planes in South-east Asia's existing fleet. The Singapore event also comes after the Dubai Airshow in November last year, where deals worth US$114 billion were already inked.
Still, there are airlines looking to order new aircraft to phase out older planes, while rising oil prices could also bolster demand for fuel-efficient, next-generation aircraft.
Mr Janardhanan expects higher enthusiasm from buyers, at least in terms of deal volume, vis-a-vis the last Singapore Airshow.
In 2016, around 50 deals were signed, many of which were for undisclosed amounts; the 11 disclosed deals were worth over US$12.7 billion.
Plane-makers Airbus and Boeing will continue to go head-to-head in their battle for orders at the event this week, but there are also ambitious upstarts seeking to break their stranglehold on the market, namely China's state-owned Comac with its narrow-body C919 and Russia's Irkut with its MC-21 single-aisle jet.
Both Comac and Irkut's parent, United Aircraft Corporation, will be participating at the event amid increased participation from Chinese and Russian companies overall this year, said organiser Experia Events.
In particular, emerging technologies are expected to play a big role in shaping discussions at the Airshow as airlines, airports, original equipment manufacturers (OEMs) and MRO players increasingly bet on digitalisation and innovation to get ahead.
In particular, the Internet of Things (IoT), 3D printing, blockchain technology, artificial intelligence, data analytics and cybersecurity are just some of the areas that will transform the industry, analysts reckon.
Leck Chet Lam, managing director of Experia Events, said: "Technology innovation is a key evolution factor in the industry, primarily in cybersecurity, digitalisation and autonomous technology disrupting the global aviation and aerospace industry. It not only brings greater efficiency and growth but will continue to disrupt traditional business models, processes and relationships."
The event organiser is introducing a new initiative this year known as 'What's Next @ Singapore Airshow', where startups will showcase their innovations to investors, business leaders and regulators. Close to 70 startups from nine countries - including Singapore, Israel, the United States and China - are set to participate in this event, with products spanning areas from urban mobility to cyber security.
Startups aside, the Singapore Airshow continues to bring back some of the aviation industry's biggest names, including 65 of the world's top 100 aerospace companies such as Bombardier, Rolls-Royce, ST Engineering and UTC Aerospace Systems. A total of 1,062 companies from some 50 countries and regions will take part in the sixth edition of the Singapore Airshow, which features both commercial and military aviation. Of these, three-quarters are returning exhibitors from the 2016 event.
Meanwhile, the list of new exhibitors includes Honda Aircraft Company, Turkish Aerospace Industries and Russia's United Engine Corp.
Against the backdrop of the Trump administration's "Buy American" initiative, a US diplomat responsible for foreign military sales will attend the Singapore Airshow for the first time, Reuters reported. This is aimed at driving sales for American-made military products including Lockheed Martin's F-35 fighter jet, which the Republic of Singapore Air Force (RSAF) is considering.
Aircraft on static display include Airbus' new A350-1000 and Embraer's E190-E2 - both of which will be delivered to launch customers in the coming months - and private jets such as Gulfstream's G500 and G600. There will also be military assets from the RSAF, the Royal Australian Air Force and the United States Air Force and Marines.
High-level conferences and forums will take place this week, starting with the Singapore Airshow Aviation Leadership Summit, which has lined up speakers including Singapore Minister for Transport Khaw Boon Wan; International Civil Aviation Organization council president Olumuyiwa Benard Aliu; Iata chief Alexandre de Juniac; and director-general (mobility and transport) for the European Commission, Henrik Hololei.
After the trade days, the airshow - at the Changi Exhibition Centre - will be open to the public on Saturday and Sunday, featuring static displays, activities and aerial displays.