Singapore Airlines Engineering Company (SIAEC) is looking at a potential partial acquisition of SR Technics Malaysia to bolster its narrowbody MRO capabilities as it enters a recovery phase “fraught with risks.” The risks are attributable to the emergence of new virus strains, resurgence of infections and reimplementing of lockdowns in some countries.
The MRO arm of flag carrier SIA reported a net loss of S$11.2 million ($8.3 million) for financial year 2020/2021, reversing the $193.8 million profit in the previous year.
On top of steps to accelerate digitalization and adjustment of its portfolio, SIAEC said it is looking to pursue new opportunities into narrowbody aircraft component repairs, with Airbus A320 and Boeing 737s forecasted to take up 68% of future deliveries.
SR Technics Malaysia has A320, A330 and 737 airframe and engine component repair capabilities.
Line maintenance revenue suffered as it handled only 27,727 flights at Changi in financial year 2020/2021, only 18.5% of financial year 2019/2020. Light checks, including ‘A’ Checks halved to 223 while heavy maintenance dipped marginally from 72 to 60.
Nonetheless, SIAEC expanded its base maintenance clientele list with numerous lessors such as Aercap, BOC Aviation, Castlelake and Boeing Capital Corporation. Fleet management signed Vietravel Airlines, while line maintenance added HK Express and Biman Bangladesh.
Total revenue slipped 55.4% year-on-year (YOY) to S$443 million, and costs also halved to S$468 million, the latter mainly cushioned by a job subsidy package from the government. SIAEC said low borrowings and a cash balance of $616.0 million on March 31 puts the company in “a strong position to face the continuing market uncertainty.”
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