SIA Engineering Company (SIAEC), which will commission two hangars in Subang, Malaysia, next year, is on the constant lookout for growth opportunities in Asia Pacific as well as other major regions, says Chin Yau Seng, CEO.

In an interview, Yau Seng speaks on a wide range of issues, including the company’s plan for China and its expanding global footprint, sustainability goals, and the joint venture for line maintenance services at the new Techo Takhmao International Airport (TIA) in Phnom Penh, Cambodia.

Here are edited excerpts from the interview:

How long did it take for maintenance demand to come back after the pandemic? Are you busier now than in the pre-pandemic period? In which area of your services has the company seen the most demand?

As the aviation industry emerges from the shadows of the pandemic, our business units have seen growth at varying rates. With the strong recovery in Singapore’s flight activities, our Line Maintenance unit is seeing work volume that is nearly at the pre-COVID level. Meanwhile, demand for Base Maintenance remains healthy and we are carrying out more third-party maintenance work. For Engine and Component Services, we are also seeing an increase in maintenance events for engine and component repairs and overhauls with increased flight activities and aircraft utilization. Our operations and commercial staff are clearly engaged and prepared for this exciting and challenging period as we move towards full recovery this year.

In December last year, SIAEC signed a lease for two hangars at Sultan Abdul Aziz Airport in Subang, Malaysia. Please provide an update on the status of the facility. Do you hope to further expand operations in the country?

With the recovery from the pandemic and ramp-up of flight activities, MRO capacity at the industry level has been tight and remains so. At SIAEC, we continue to seek ways to increase capacity and improve productivity through Lean and Continuous Improvement. Our plan for a new base maintenance setup in Subang, Malaysia is another important development for SIAEC as it will increase our airframe maintenance capacity even further. The two Subang hangars that we will be commissioning will represent our third base maintenance hub in Asia-Pacific and will complement our MRO ecosystem in the region. Both hangars will first undergo refurbishment work and we hope to commence hangar operations in Subang next year.

Besides base maintenance, we have also expanded our component MRO and line maintenance footprint in Malaysia. Our subsidiary, Asia Pacific Aircraft Component Services (APACS), a joint venture (JV) between SIAEC and SR Technics Switzerland, is an important component MRO shop in Asia-Pacific. Last year, APACS expanded its long-term partnership with Honeywell and was awarded two licenses to perform repairs on Honeywell’s Air Data Inertial Reference Unit (ADIRU) and Pre-Cooler Control Valve (PCCV) products.

In addition, we formed a JV with Eaton, a global manufacturer of aircraft components, in July 2023 to grow our component repair capabilities for new-generation aircraft and increase the competitiveness of our component solutions. This partnership, which combines SIAEC’s extensive experience and Eaton’s global reach and customer base, complements our existing portfolio of engine and component JVs with other OEMs.

On the line maintenance front, we completed the acquisition of 49% of Pos Aviation Engineering Services Sdn Bhd (PAES) in August 2023, enabling SIAEC to serve a broader customer base in the region. PAES offers MRO and engineering services at nine airports in Malaysia. With the addition of PAES, our line maintenance international network has grown to 36 stations in eight countries.

The hangars at Sultan Abdul Aziz Airport constitute the company’s third base maintenance hub in the Asia-Pacific region. Does the company have plans to further expand its operations in the region? 

Besides hangars in Malaysia, we have also signed a JV agreement with Cambodia Airport Investment Co to establish line maintenance services at the new Techo Takhmao International Airport (TIA) in Phnom Penh. The plan is to develop this new JV into a regional aircraft MRO hub in TIA, further strengthening our position as a leading line maintenance service provider in this region. The JV is expected to be operational by mid-2025 after TIA opens.

As an MRO based in Asia-Pacific, we are constantly looking out for growth opportunities in the region and will continue to work with the right partners to better support our customers.

The company recently signed an MoU with China-based Xiamen Iport Group for collaboration. What is the status of the relationship? With China’s commercial airliner fleet set to more than double over the next 20 years, do you see the country as a major market?

China is certainly an important market with its MRO demand also expected to grow significantly in the coming decade. As previously announced, we are working with Xiamen Iport Group, a state-owned enterprise engaged in the business of services and investment holding of trans-national and diversified businesses including aviation management, to establish a framework to identify potential areas of MRO collaboration. Both parties will evaluate suitable opportunities that will leverage SIAEC’s comprehensive MRO service offerings, certifications, and maintenance capabilities, and Iport Group’s extensive infrastructure and resources in Fujian, China.

The company has approvals from 29 national aviation regulatory authorities to provide MRO services. Have shop visits of aircraft registered in other countries increased significantly over the years?

We have been reaching out progressively to a broader pool of customers worldwide. In recent years, we have diversified our base maintenance customer base beyond Asia, securing long-term customers in North America, India, and Oceania regions. 

Our paint and cabin shops have also seen an increase in requests from various airlines from multiple jurisdictions in the past two years. This is in line with the broader trend of airlines investing to upgrade and refresh their livery and cabins to meet customer expectations as the aviation industry recovers from the pandemic.

How much of a role does artificial intelligence and data analytics play in the company’s operations? How advanced are you in terms of predictive maintenance?

SIAEC is continually seeking to enhance its operations through the use of artificial intelligence (AI) and advanced analytics. We are dedicated to harnessing the power of AI to transform data into actionable insights, enabling us to enhance aircraft maintenance processes, optimize resource allocation, and improve overall operational efficiency. We have been working on AI-based solutions that predict equipment failures and suggest solutions. Emphasis has also been placed on utilizing optimization models to improve planning, fine-tune resource allocation, and optimize work scheduling and supply chain operations. 

What is the company doing in terms of sustainability?

As a responsible MRO service provider, we continue to support the aviation industry’s goal of net zero carbon emissions by 2050. In the medium term, we are committed to halving Scope 1 and 2 carbon emissions by 2030 against our financial year 2019/20 baseline. We have also set 2030 goals in the areas of economic, environmental, social, and governance, which serve as an important guide as we pursue sustainable growth in this decade. Some of our key initiatives to reduce emissions include the installation of solar panels on the roofs of our buildings and a hangar in the Philippines. Five of our hangars in Singapore are also certified Water Efficient Buildings (WEB), two of which are certified Green Mark (Platinum rating) and Super Low Energy Buildings. We are also conducting trials to test the operational readiness of our engine test cell to use Sustainable Aviation Fuel (SAF) for engine tests. In addition, we are progressively transitioning from conventional tow tractors to electric models.

Shortage of qualified aviation maintenance technicians is a big issue for MROs globally. How is the company dealing with the situation? What is being done to attract young talent?

Global shortage of qualified aviation maintenance technicians is indeed a significant challenge for MROs. We are actively addressing this issue through a multi-pronged approach. Firstly, we are managing this through reskilling and upskilling our existing workforce. This not only enhances our in-house capabilities but also helps in retaining our skilled employees. Secondly, we continually evaluate our remuneration packages and adjust them, if needed, to be competitive, as well as ensure that our employees have good career development and progression opportunities. In addition, we have a structured Talent Management Framework where high potential employees with the desired leadership qualities and potential to assume key management positions can be identified.

We have also partnered with Institutes of Higher Learning (IHLs) in Singapore to build future pipelines of trainee technicians and trainee aircraft engineers. And we continuously work on improving our employer branding to make SIAEC more attractive to young talent. This includes showcasing our commitment to innovation, career development opportunities and a positive work culture. We believe that these strategies will help us attract and retain the qualified technicians we need to continue providing top-notch MRO services.

What is the biggest lesson that the pandemic has taught you? How much have your processes changed since then?

The Covid-19 pandemic taught us the importance of adaptability and resilience. Our efforts to strengthen our core competencies and build new capabilities during the pandemic have put us on a firmer footing to capture post-Covid business opportunities. During the period of significantly reduced flight activity, we embarked on a number of digital transformation initiatives to enhance and streamline processes within the organisation. The incorporation of Lean, digital and other technical skillsets among our workforce has also significantly improved our operational agility, enabling us to better handle disruptions and drive improvements.

Today, as we shift from the transformation phase to a mindset of continuous improvement, we will continue to strengthen our maintenance planning and execution, creating value for our stakeholders and bolstering our competitiveness.

What are your company’s strategic goals for the next ten years in terms of expansion, partnerships, or introduction of new technologies and services?

Air traffic in Asia-Pacific continues to improve as airlines in the region see higher demand. To ensure that SIAEC emerges stronger and gears up for the opportunities beyond, we have built on our multi-faceted strategy to invest in new capabilities and reshape our business to drive long-term sustainable growth. To this end, we continue to expand our capabilities and services for new generation aircraft in our own shops, as well as broaden the scope and capabilities of our JV network through closer collaboration with existing partners and through new partnerships. We are also looking to expand our geographical footprint by securing new customers, as well as through developing or investing in overseas businesses, with line maintenance as one of the areas of focus.

In the area of innovation and technology, our digital transformation initiatives aim to deliver value through operational excellence, customer intimacy and service innovation. We continue to invest in innovation initiatives and technology adoption projects in aerospace MRO, and collaborate with airlines, research institutions and technology partners to develop new solutions to better serve the MRO needs of airline customers.