Singapore's aerospace sector set to fly higher despite setback

Singapore

THE pullout of more than 70 firms from the Singapore Airshow 2020 may have dealt a setback to the biennial show, but prospects for the overall industry remain bright as it prepares to capitalise on growing demand for air travel and aircraft in the region.

Lim Tse Yong, director of capital goods at the Singapore Economic Development Board (EDB), said: "We expect there will be impact on air travel, business and consumer confidence, especially as the 2019 novel coronavirus may persist for some time.

"However, the long term prospects for the aerospace industry in Asia remain positive. This industry also continues to be a bright spot for Singapore, supported by the spectrum of complex and high value-added activities here."

The latest figures from EDB show that the local aerospace sector's total output had a compound annual growth rate of 10 per cent between 2015 and 2018, and surpassed S$11 billion in 2018. Total employment in the industry soared to 22,000 by more than 1,000 over the same period. (see amendment note)

Mr Lim noted that Singapore continues to prepare itself to address the industry's future needs, by partnering companies to support Internet 4.0 technologies and equipping the workforce with relevant skills such as robotics and automation, additive manufacturing and data analytics.

This will position the local sector well to benefit from projected growth in Asia-Pacific's aviation industry. Global consulting firm Oliver Wyman estimates that Asia will account for 40 per cent of the global fleet by the next decade, driven by demand from the rising middle class. Meanwhile, Boeing projects that 39 per cent of global new deliveries from 2019 to 2038 will come from Asia-Pacific.

Global aerospace companies also continue to invest deeply in Singapore as a regional hub.

In 2018, Thales launched its first Digital Factory in Asia here, and plans to double the number of employees and invest more than 20 million euros (S$31.2 million) in the facility over five years.

And since 2017, Rolls-Royce has invested a total of S$69 million into a smart manufacturing joint lab with Singapore's Agency for Science, Technology and Research (A*Star) and Singapore Aero Engine Services (SAESL), to develop technology solutions for manufacturing and MRO (maintenance, repair and overhaul) applications.

Over the last decade, some of the biggest changes that have taken place in Singapore's aerospace industry include the proliferation of MRO services and the adoption of more Industry 4.0 innovations and automated solutions, companies in the sector told The Business Times.

Gail Baker, vice-president of aftermarket services at Collins Aerospace, praised the growing MRO and manufacturing scene and innovative culture here, saying: "The innovation ecosystem in Singapore is driven strongly by the government which has created an excellent environment for companies to develop new ideas and concepts.

"The thriving aerospace industry in Singapore has allowed for proof of concepts, prototyping and full scale deployment across the 300+ factories and MRO shops across Collins."

ST Engineering noted that the industry is realising that it must transform operations through technology, as a global shortage of aircraft technicians looms. The company itself started going digital about three years ago, focusing on four fronts - digitisation, data analytics, additive manufacturing and automation - and the initiatives have improved operations by reducing costs, improving quality, reducing inventory and increasing the work rate, said Lim Serh Ghee, president of ST Engineering's aerospace sector.

"At the same time, we have been harnessing new and tested technologies to help us develop value-adding and more efficient solutions to support our customers in original equipment manufacturing and aftermarket services," Mr Lim said. For instance, a robotic arm that has taken over the manual polishing of airfoils has reduced time taken to polish a set of airfoils by more than 60 per cent, from 2,800 minutes to 1,000.

The industry's evolving demands has led Thales to recruit more than just traditional engineers and collaborate with academic institutions to build a strong internal digital culture.

"While traditional engineers still bring essential skills, the new aerospace industry attracts people with digital skill sets and mindsets and who are open to new ways of working," said Kevin Chow, country director and CEO for Thales in Singapore.

"In our Digital Factory, for example, we recruit engineers, but also scrum masters, data scientists and UX and UI (user experience and user interface) experts, reflecting our evolving emphasis as a company... We believe that by engaging with aspiring engineers, we bring new perspectives to solve innovation challenges and grow the pool of design-conscious talents in the industry."

Thales has been in Singapore for more than 40 years, and operations here include its largest avionics repair hub in the world. The company is committed to investing in Singapore, Mr Chow said, noting that it is now one of the largest France-headquartered MNCs here.

"Singapore boasts a highly conducive business environment and infrastructure, a talented workforce and a strong government mandate. This is complemented by support from organisations like EDB and meaningful collaborations with local stakeholders like CAAS in exciting new, digitally-inclined technologies," he said.

"We see that for the type of work we do and through the discussions we have with our customers and partners, that Singapore is the place to be to make some of these exciting developments happen."

Amendment note: A previous version of the article said that employment in the aerospace industry rose to 22,000 from 1,000. The change was an increase of 1,000 instead. The article above has been amended to reflect this.