In a business update, SIA Engineering says with international flight activities continuing to recover with progressive relaxation of border restrictions and establishment of bilateral travel arrangements, the number of flights handled at the Group’s Singapore base was 65% higher year-on-year and 17% higher quarter-on-quarter. While this volume of flights handled is only at 31% of pre-pandemic volume, the continuing recovery trend is encouraging, the company says.
According to the company, with this recovery, demand for transit services and aircraft return-to-service work increased while demand for aircraft preservation work reduced as more aircraft return to service. At Base Maintenance, more aircraft maintenance checks were performed during the quarter as compared to last year, but the work content of these checks was lighter as a higher proportion of the checks performed were for young new-generation aircraft. The Engine Services Division formed at the start of the financial year is making progress in growing its suite of engine-related capabilities. Its new facility to provide quick turn maintenance on CFM LEAP engines will start operations towards the end of this financial year.
During the three months to Dec 31, 2021, longterm contracts were signed to provide CFM LEAP engine testing services to Safran Aircraft Engines and expanded on-wing services for Rolls-Royce Trent engines. Preparations to strengthen these capabilities are in progress before the engine maintenance activities commence and will gradually pick up in the next financial year. With higher flying activities, business volume at SIA Engineering's joint venture companies is also gradually recovering. Total engine inductions and shipments at our engine JVs is about 25% below the pre pandemic level.
However, the Group’s revenue recovery remains uncertain even with progressive opening of Vaccinated Travel Lanes as the recent spikes in Covid-19 cases caused by the more contagious Omicron variant has disrupted international air travels which have been gradually building up. Performance outlook depends on the extent of revenue recovery outpacing costs and the tapering of government wage support.
SIA Engineering's share price closed unchanged on Monday, Feb 21, and is up 6.42% this year.
