Asia-Pacific’s aerospace MRO players must be adaptable, collaborate for growth: panellists

[SINGAPORE] Adaptability and ecosystem-wide collaboration are key to the growth of Asia-Pacific’s aerospace maintenance, repair and overhaul (MRO) sector, said panellists at a roundtable organised by The Business Times on Wednesday (Sep 3).

The aerospace industry is ascending, and the demand for MRO services is rising in tandem – not least in Singapore.

Today, one out of 10 aircrafts are serviced in the Republic, said panellist Zheng Jingxin, vice-president for mobility and industrial solutions at the Economic Development Board (EDB). For engines, Singapore accounts for nearly 19 per cent of the global engine MRO share.

Yet as the industry expands in the region, it will face both growing pains such as structural shifts, and new opportunities such as innovative technology.

Amid these changes, players need to be nimble and work together, panellists said at the roundtable, themed “Advancing MRO for a Resilient Aerospace Industry in Asia-Pacific” and presented by GE Aerospace.

The aerospace sector showed its ability to change gears during the Covid-19 pandemic, noted the panellists.

“Overnight, the entire aviation industry shut down,” recalled Yip Hin Meng, executive vice-president and head of aerospace MRO, ST Engineering. With planes grounded, staff needed to be redeployed.

Instead of scaling down, ST Engineering started building hangars in China and Singapore, and expanded its facilities in Pensacola in the US, to prepare itself for the sector’s rebound.

And while passenger travel had halted, there was an opportunity in freight. Seizing this, ST Engineering invested in passenger-to-freighter conversion and started a business in leasing these converted freighter aircraft.

As for manpower, EDB’s Zheng noted that when Covid struck, Singapore “creatively redeployed” aerospace and aviation workers into other services sectors.

This ensured that their skill sets could be “transferred back to ride the upside” when the industry rebounded.

The government also worked with companies to invest in innovations in areas such as robotics and additive manufacturing. This helped to “pre-position” the industry for the post-Covid rebound, he added.

Beyond pandemic-era pivots, adaptability is key to addressing workforce challenges, said Iain Rodger, GE Aerospace’s managing director for component repair in Singapore. As technology develops, workers must be able to upskill and reskill.

Another form of flexibility is being willing to change course when needed. GE Aerospace has done so in cases where introduced technology “actually (doesn’t) make too much difference to the customer”, said Rodger.

Adaptability is also important in navigating challenges such as supply chain shifts, Zheng said.

Companies should derisk, diversify and digitise their supply chains, he said. This can be achieved with a wide network of free trade agreements – of which Singapore has 28 – and economic partnerships.

Yip observed that pre-Covid, the aerospace sector had a just-in-time inventory management strategy. But since then, supply chain disruptions have required ST Engineering to adapt its inventory management approach.

This includes working with original equipment manufacturers (OEMs), “predicting where the volume of work is going to be coming from”, and analysing trends across regions.

Shared progress

Working with OEMs is one example of how industry collaboration can boost growth.

For ST Engineering, partnerships provide access to capital, information and capacity: sovereign wealth funds and investors for capital, for example, and government agencies for access to land and funding for the development of the airport area.

The company also works with OEMs through joint venture partnerships, or long-term partnering or licensing arrangements; and with airlines to bring “efficiencies and operations and scale” into their MRO facilities.

GE Aerospace’s Rodger noted that while collaboration is not new, it will become increasingly prominent as demand rises and order volumes increase.

Collaboration is also essential for technological advancement, said Yip. This includes working with regulators on the integration of automation and artificial intelligence in MRO services.

Zheng noted the success of MNC-SME collaborations – which EDB supports through the Partnerships for Capability Transformation Scheme, for example – and public-private partnerships.

Collaborations are paramount on the manpower front too, agreed the panellists. Companies must work with unions or institutes of higher learning to equip workers with the knowledge, skills and experience needed.

Deeper partnerships for aerospace players may involve “thinking out of the box”, said Zheng.

This could involve working with other manufacturing and manufacturing-related services and sectors. Companies might have synergies even across industries.

“You can partner, maybe, with a semiconductor company, or you can learn from what a healthcare company is doing in terms of process development,” he explained. 

This collaboration across different types of manufacturers is part of the “community of practice” that Singapore is trying to build as part of its advanced manufacturing push, he added.

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