Global MRO Demand Expected To Boost ST Aerospace’s Profits

By Lee Ann Tegtmeier
Source: Aviation Daily
November 01, 2013

ST Aerospace’s top executive expects 2013 profits to be higher than last year’s SGD$303.8 million ($245 million).

While Singapore-based ST Aero has been expanding globally, President Chang Cheow Teck is cautious about growing capacity too much, because of an expected drop in airframe maintenance starting in about five years due to work from older aircraft dropping off.

One exception, however, is in China. ST Aerospace expects to open its facility in Guangzhou in December, after receiving Civil Aviation Administration of China approval. Chang says the first input will be an Airbus A320 operated by a Chinese carrier.

The MRO has been training personnel in Singapore and has 300 employees ready for the launch.

The company has benefited from the booming interiors market, and has more than 30 aircraft on a turnkey interior basis.

ST Aerospace, which acquired a 35% share in EADS EFW in February, has launched engineering efforts for Airbus A330-300 passenger-to-freighter conversion work. Chang says the company selected this type because it is complementary to the Airbus freighter production models. He sees a market for 100-150 A330 converted freighters, although that number could be conservative.

The company already is experienced with the 14-pallet Boeing 757 passenger-to-freighter conversion, for which ST Aero has been the primary modification house for FedEx. Chang says ST Aero has 119 total 757 freighter orders so far.

This supplemental type certificate does not include winglets because it was primarily developed for FedEx requirements, but ST Aero recently developed a 15-pallet version with winglets that Chang believes could be particularly attractive to lessors. “The 757 still will have legs for years,” he says.

Although the cargo market has been depressed, Chang predicts freighter demand will be robust after 2018.


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