Aerospace to Singapore

Trends and opportunities

The market

Singapore is one of the world’s leading aerospace hubs, and the largest in the Asia-Pacific region. Over the past 20 years, Singapore’s aerospace engineering industry has expanded at a compounded annual growth rate of 10 per cent. With the demand for air travel in the Asia-Pacific continuing to increase, it creates numerous aviation-related opportunities within the aerospace manufacturing, Maintenance, Repair and Overhaul (MRO), research and development (R&D) segments, as well as general aviation and componentry distribution, among others.

The outlook for the aerospace industry remains positive, despite the economic downturn buffeting a number of countries. Within Asia, air traffic and aircraft fleet size are expected to increase, helped by rising demand from regional economies such as China, India, and ASEAN countries, in tandem with the growing middle-class population.

Globally, the aerospace industry is also poised for expansion and approximately one third of all worldwide aircraft deliveries will go to Asia over the next 20 years, according to aircraft manufacturers Boeing and Airbus. As such, by the 2030s, the size of Asia Pacific’s fleet is anticipated to triple to approximately 15,000 wide and narrow body aircraft.

Singapore has a vibrant ecosystem of aerospace and aviation companies and offers a highly efficient and all-round cluster of capabilities competitively. There are over 100 aerospace companies1 in Singapore, employing over 19,000 people, and with an industry output of over A$8 billion. As the most comprehensive aerospace MRO hub in Asia, this segment contributes 25 per cent of the region’s total MRO output.

As part of Singapore’s effort to compete and increase its aerospace footprint in the region, the Seletar Aerospace Park (SAP) was developed as an integrated and dedicated aerospace industrial park focusing on:

  • Aerospace MRO, focusing on narrow bodied aircraft
  • Design and manufacture of aircraft systems, components, and potentially light aircraft
  • Business and general aviation activities
  • Regional aerospace campus, which will house education and training institutes and research facilities

Spread over 300 ha, SAP provides world-class aerospace facilities equipped with full-fledge business infrastructure and complete runway access, among others.

To date, a number of multinational corporations (MNCs) have opened facilities, including Rolls-Royce, Pratt & Whitney, Bombadier, Cessna Aircraft, Bell Helicopter, Hawker Pacific, and Fokker Services Asia.

Opportunities

The aerospace industry in Singapore comprises:

  • MRO of airframe/equipment for military, commercial aircraft and general aviation
  • Manufacture of airframe structures, aircraft equipment and engine components
  • Design and development of avionics systems
  • Refurbishment and reconditioning of engines, parts and accessories
  • Calibration, testing and other specialised services
  • Warehousing and distribution of aircraft parts

The strategic location of Singapore, situated at the crossroads of heavy air traffic, is a major impetus to the growth of the aerospace industry. As a major aviation hub, service and maintenance of aircraft and aircraft component and manufacturing in Singapore is projected to grow significantly. The government, together with the Civil Aviation Authority of Singapore (CAAS) and the Singapore Economic Development Board (EDB), places high emphasis and investments on new infrastructure, labour and aerospace technology development to enhance and sustain the industry’s continued growth despite the current economic situation.

The CAAS, which is the aviation regulatory body in Singapore, is responsible for implementing and maintaining airworthiness standards, including the initial approval and subsequent monitoring of firms involved in the manufacture, overhaul and maintenance of aircraft, engines, propellers and associated components. Monitoring involves approval of procedures, equipment and personnel of companies engaged in the local industry.

Output of the Singapore aerospace industry can be quantified as:

  • MRO market (90 per cent): Avionics repair and overhaul makes up nearly a fifth of all repair and overhaul works.
  • Manufacturing sector (10 per cent).

One of the more significant activities is the repair and overhaul of engines and engine components. This involves precision machining, heat treatment and plasma coating hence requiring a complex skill base and substantial capital investments. This sector has grown substantially since the 1970s.

In the medium term, aerospace manufacturing is expected to grow faster than aerospace repair, providing a new growth engine for the industry and is expected to increase its industry output by up to 30 per cent by 2030. The range of activities vary from engine components, landing gear systems, engine fan blades, sub-systems.

Future airport handling capacities will also be increased as passenger capacity is projected to grow from the present 66 million passengers to 135 million (by 2025). New passenger Terminals 4 and 5 are being built/planned ahead of demand. The future demand for other support services, e.g. catering, cleaning, fuel supplies, logistics services and ground support equipment, should also grow in tandem. Other areas of growth potential will be aircraft leasing/financing, the sale of used aircraft and the training of pilots and air-crew as airlines expand/upgrade their fleet.

Competitive environment

While Singapore is a preferred aerospace hub in the Asia-Pacific, with a comprehensive range of aerospace MRO and aftermarket services, as well as advanced manufacturing capabilities, its pole position is continuously under threat, with regional countries strengthening their aerospace sectors as part of their wider air hub aspirations. For example, Malaysia has established an MRO cluster at Subang Airport which has attracted key aerospace players, while, the Lion Group will be building MRO facilities at Batam Island, which is about 45 minutes away from Singapore by ferry.

Singapore’s competitive and sustainable strengths lie in its business environment. The availability of trained skilled labour, progressive international regulations and embarking on continuous improvement processes to increase stakeholders value, are some of the key traits which enable Singapore to retain its hub status.

Tariffs, regulations and customs

Singapore is virtually a free port, with very low tariffs on imported goods. The main dutiable items are:

  • Petroleum products
  • Liquors
  • Motor vehicles
  • Cigarettes

A Goods and Services Tax of 7 per cent is imposed on imported goods. The tax is calculated on the CIF value of the goods, plus commission and other incidental charges and all customs duties payable, if applicable.

Industry standards

For the aerospace manufacturing sector, the minimum standards required is AS9100 revC and if certain additional process is required e.g. heat treatment or surface coating, the NADCAP (National Aerospace & Defence Contractors Accreditation Program) is mandatory.

For the MRO sector, CAAS regulates the standards, which follows closely with the EASA/FAA guidelines, and these standards covering maintenance, production and design can be found here .

In 1981, a bilateral airworthiness agreement was signed between Singapore and the United States. This allows the CAAS to certify made-in-Singapore components to be exported to the US without further certification by the US Federal Aviation Administration (FAA).

In addition, Government-owned SIA Engineering Co Ltd (which is a subsidiary of Singapore Airlines Ltd) and Singapore Technologies Aerospace (a subsidiary of ST Engineering) are qualified to carry out ‘Section 41’ structural works on B747 aircraft (i.e. structural repairs from the nose to the first passenger door when the aircraft has completed 20,000 flight landing/take-off cycles).

These certifications have allowed the industry to diversify into other areas of aircraft maintenance. However, with the advent of composites structures increasingly used in aircraft e.g. the new Airbus A350, which has over 50 per cent of its wing/fuselage made entirely of composites, the maintenance frequency for newer aircraft is longer as compared to the all-aluminium body B747 aircraft.

Marketing your products and services

It is common for end-users (airlines) to purchase aircraft equipment/products direct from the original equipment/component manufacturers as all aircraft components and engines must be FAA/EASA/CAAS certified.

CAAS-approved agents/distributors/MRO providers often offer installation, commissioning, replacement and repair services and many have technical sales teams which market directly to end-users. For airport ground support equipment, no FAA/EASA approval or certification is required.

All government tenders, including CAAS tenders, are normally gazetted as either a public or closed tender.

  • For a public tender, which can be found on the Government E-Business website, only Singapore-registered local vendors or Singapore-based overseas vendors, overseas vendors who have registered with the appropriate tendering authority that meet prescribed financial classification or overseas companies who are invited to tender via High Commission/Embassy channels may participate.
  • For a closed tender, a sole source, or a select few, is/are eligible to bid. Invitations to vendors to 'pre-qualify' for major turnkey projects are also gazetted.

Please click here for guidelines on government tendering procedures.

For the aerospace manufacturing sector, in view of the stringent quality assurance standards required, Austrade is working with major OEMs such as Singapore Technologies Aerospace Ltd, Embraer, Rolls-Royce, Pratt & Whitney, to access their global value chains via the clustering of Australian aerospace accredited organisations. A number of these OEMs conduct their sourcing from their regional HQ in Singapore.

Links and industry contacts

Ministry of Transport - all land, sea and air regulatory bodies fall under the purview of this ministry, including accidents investigations
Civil Aviation Authority of Singapore - aviation regulatory authority in Singapore
Changi International Airport - for information on Singapore’s Changi airport
Singapore Aviation Academy - aviation and aviation-related training institution
Dnata Singapore Pte Ltd - provider of airport ground support services, in-flight catering, security and cargo services
Singapore Airlines Ltd - Singapore’s main carrier
SIA Engineering Ltd - an SIA subsidiary that provides aircraft overhaul, repair and maintenance services
SIA Cargo Pte Ltd – an SIA subsidiary involved in air cargo transportation
Singapore Technologies Aerospace Ltd - Singapore’s defence and commercial aerospace manufacturing and maintenance company
Singapore Airport Terminal Services Ltd - provides airport ground support services to Changi nternational airport
International Enterprise Singapore - government’s trade promotion authority
Customs & Excise Department - oversees all trade customs and excise functions in Singapore

Please note: This list of websites and resources is not definitive. Inclusion in this list does not imply endorsement by Austrade. The information provided is a guide only. The content is for information and carries no warranty; as such, the addressee must exercise their own discretion in its use. Australia’s anti-bribery laws apply overseas and Austrade will not provide business related services to any party who breaches the law and will report credible evidence of any breach. For further information, please see foreign bribery information and awareness pack.

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