Latest Seletar Airport News
Feb 18, 2021
Commentary: This is why Singapore needs to save its airlines and aviation sector Toggle share menu Advertisement Commentary: This is why Singapore needs to save its airlines and aviation sector It should be unsurprising that the health of industries within the aviation ecosystem is being supported as a key pillar of the economy, says Dr Faizal Yahya from the Institute of Policy Studies. File photo of Changi Aiport's transit area. (Photo: Nicole Chang) Bookmark SINGAPORE: Budget 2021 has adopted a more focused approach towards the most impacted sectors of the economy. For example, S$870 million was provided to support the aviation sector, including a 10 per cent landing charge rebate for all scheduled passenger flights landing in Singapore for airlines, and a 50 per cent rebate on rental paid for ground handling companies’ lounges and offices within Changi Airport and Seletar Airport terminal buildings. Advertisement Is this support justified? As mentioned by Deputy Prime Minister and Minister of Finance Heng Swee Keat in his Budget speech on Tuesday (Feb 16), this support is to preserve the core capabilities and Singapore’s position as a hub for global air travel and industries directly linked to this critical sector. Advertisement In strategic terms, the aviation sector provides essential air connectivity for Singapore. IATA reported that in pre-COVID times, air transport connected Singapore to approximately 159 international destinations as some 73 airlines operated out of Singapore. A Singapore Airlines Airbus A330-300 plane takes off behind one of the airline's Boeing 787-10 Dreamliners at Changi Airport on Mar 28, 2018. (File photo: Reuters/Edgar Su) Advertisement To put it in perspective, much of Singapore’s economic growth and status as a global aviation hub and trading nation was facilitated by the 355,400 aircraft landings and take offs from Singapore. Therefore it is unsurprising that the health of industries within the aviation ecosystem is being supported as a key pillar of the economy. These include aircraft maintenance, repair and overhaul (MRO), financial services, supply chain management and manufacturing. JOBS AND MORE JOBS Aviation giants like Airbus, Rolls-Royce and GE Aviation have invested heavily in facilities here – as explained below - which in turn create local jobs, because of Singapore’s focus on being an aviation hub. Singapore itself has invested heavily in the aviation ecosystem which is crucial for the economy and supported by specialised training and R&D to further develop skillsets necessary to seize future opportunities. Trade and Industry Minister Chan Chun Sing and Minister of State for Manpower and Education Gan Siow Huang during a visit to Singapore Aero Engine Services (SAESL) on Sep 1, 2020. Accompanying them is NTUC Aerospace and Aviation Cluster vice-chairman Sazali Zainal. (Photo: Ministry of Trade and Industry) According to the Civil Aviation Authority of Singapore (CAAS), the aviation industry contributed about 3 per cent of Singapore’s total GDP and provided some 119,000 jobs. These included employers in the airlines industry, airport operators, airport on-site enterprises and aircraft manufacturers. IATA estimated that in total, Singapore’s air transport sector supported 375,000 jobs. These were made up of the 119,000 jobs in the aviation industry, 78,000 jobs in ancillary support industries and a further 26,000 positions that were supported by the spending derived from the aviation industry. If inflows of foreign tourists were included, their spending supported a further 152,000 jobs. Furthermore, the air transport sector and supply chain sector added S$29.4 billion to Singapore’s GDP. In addition, spending by foreign tourists contributed another S$19.3 billion to GDP that amounted to a total of S$48.7 billion as gross value contribution to GDP or 11.8 per cent of Singapore’s GDP. IMPORTANT AVIATION HUB The key core and strategic capabilities contained within the Changi and Seletar air hubs, such as efficient processes, automated systems, world-class customer service and high accessibility, have enabled Singapore to be Asia’s leading solutions provider for MRO services that makes up 10 per cent of the global MRO output. Functioning as a one-stop solutions provider, Singapore offers end-to-end services for the MRO needs of the aviation industry. This MRO landscape consists of Singapore enterprises and multinational companies (MNCs). FILE PHOTO: A man looks at Rolls Royce's Trent Engine displayed at the Singapore Airshow in Singapore February 11, 2020. REUTERS/Edgar Su/File Photo They include ST Aerospace, Pratt & Whitney, Bombardier Aerospace and Rolls – Royce – companies that are helping ensure that Singapore remains prominent on the global aviation map. For instance, ST Aerospace is collaborating with Airbus to develop the A330 Passenger-to-Freight (P2F) conversion process. This is a first for Airbus to appoint a third-party to undertake a P2F conversion, which is a complex procedure for aircraft modification. The aim of the A330 P2F conversion programme is to initiate the process of an aircraft modifications centre. As part of its aircraft modifications plan, ST Aerospace has built an aircraft hangar in Changi North and a hangar in the Seletar Aerospace Park. The P2F programme is critical to expanding the air freight logistics sector as it is currently growing and could utilise the spare capacity left by the passenger sector. In terms of R&D activities, Rolls-Royce has established its Advanced Technology Centre (ATC) in Singapore to support the Seletar air hubs manufacturing activities. Through its research, the Rolls-Royce ATC provides expertise in the provision of materials support and R&D solutions in the areas of computational engineering and electrical power and control systems. The EDB is leveraging on the specific skills sets in MRO activities to establish more complex manufacturing activities in Singapore such as engine fan blades and avionics computers. SECURING SINGAPORE’S SUPPLY CHAIN The pandemic has highlighted the fragility and need to build resilience for supply chain management. Singapore is a key node for supply chain networks and the logistics industry due to its air connectivity and advanced infrastructure. First, keeping Singapore’s aviation sector alive also helps maintain its position as a node in supply chain networks, which has implications on the country’s ability to source other products, including food supplies and essentials, as well as affect the competitiveness of other industries. During the circuit breaker last year, those in Singapore would have seen how supply chain shocks can cause mass panic and genuine concerns. This capability has also helped us get easy access to COVID-19 vaccines, which require advanced cold-chain logistics. Singapore's first shipment of COVID-19 vaccines arrives at SATS Coolport on Dec 21, 2020. (Photo: Chew Hui Min) Second, being well-placed in supply chain networks has also enabled Singapore to become a regional distribution centre for aerospace firms. For example, Satair, together with Airbus, has opened a joint distribution centre to support logistics and repair for aircraft. Located at Seletar Aerospace Park, the distribution centre accommodates Airbus’ inventory for spares and parts that supports its customers in the Asia Pacific region. SUPPORTING OTHER INDUSTRIES In conjunction, specialised services such as aircraft leasing are operated by 20 aircraft leasing companies based in Singapore. They perform key functions such as aircraft asset management, financing and legal services, meaning there is a spillover of benefits for the legal and finance sectors. Some of these companies include Nordic Aviation Capital Singapore, which is keen to grow its operations here to extend its reach into the region. The Singapore Airshow is Asia's biggest aviation event. (File photo: AFP/ROSLAN RAHMAN) Another company, Titan Singapore Aircraft leasing, was formed in Singapore to create new roles in fleet management and finance to support the company’s sales and marketing efforts for not only the Asia Pacific region but Africa as well.