Contributor - Middle East

Peter Shaw-Smith

Singapore-based technology, defense, and engineering group ST Engineering&nbsp;saw year-on-year revenues in its commercial aerospace business rally 27 percent in the third quarter last year as the company&nbsp;forges ahead on passenger-to-freighter aircraft conversions.&nbsp;An order for 18 A320 family aircraft conversions for San Francisco, California-based aircraft lessor BBAM, announced last&nbsp;August, came as a particularly welcome boost. MRO utilization stood&nbsp;at more than two-thirds of its total&nbsp;capacity in the first nine months of last year.
ST Engineering&nbsp;saw a surge in its order book to S$18.2 billion ($13.5 billion) in September, up from S$15.4 billion at the end of&nbsp;2020, and secured S$1.82 billion of new contracts in the third quarter. New agreements&nbsp;included a five-year component maintenance-by-the-hour contract&nbsp;from Japan Airlines, a five-year CFM56-7B engine MRO contract from Alaska Airlines, and a five-year airframe maintenance contract for an Asia-based low-cost carrier.
“Compared to the rest of the world, Asia-Pacific saw little improvement in air travel in 2021,” Jeffrey Lam, ST Aerospace president of commercial aerospace, told AIN. “Although some degree of momentum built up toward&nbsp;the end of the year, Omicron stalled it when governments across the region erected new barriers for entry and exit. We expect domestic travel and MRO work for narrowbody aircraft to continue leading the way for recovery in Asia-Pacific in the near term unless governments decisively remove travel bans or restrictions that encourage more international travel.”
ST Engineering claims more than 45 years of experience in aviation, backed by an experienced team of engineers and technicians across facilities in Asia-Pacific, the U.S., and Europe. “We have proven nose-to-tail life cycle solutions, from design and engineering, original equipment manufacturing (OEM), MRO services to aircraft and engine leasing,” Lam said.
Despite the challenges that Covid-19 continued to pose to the global aviation industry in 2021, the airframe MRO business saw the fastest recovery, he said, while recovery of component and engine MRO businesses proved slower as many operators still used equipment with green time.
“The freighter market and our freighter conversion business was a bright spot in 2021,” he said. “The heightened interest in dedicated freighters translated to a number of orders, with conversion slots for our Airbus program fully booked through 2024. Our OEM business also saw improvements, with our biggest nacelle program, the A320neo, experiencing a steady recovery.”
Elbe Flugzeugwerke GmbH (EFW) communications head Anke Lemke told AIN the Germany-based firm had served as a center of excellence for Airbus P2F conversions for nearly three decades, having redelivered some 200 A300 and A310 conversions for around 40 customers worldwide; ST Engineering now owns 55 percent of EFW, while Airbus holds the remaining 45 percent.
“Due to the high demand for the new Airbus freighter, EFW is increasing capacity in Dresden, Germany (six lines by 2023), and added conversion sites in Singapore (A321 and A330)&nbsp;and in China and the U.S., which both house two sites, one for A321s and one for A330s, all fully supported by the EFW engineering team in Dresden, Germany,”&nbsp;she said.&nbsp;
“ST Engineering is converting A321s at Singapore Seletar (five in 2021), using the EFW supplemental type certificate (STC), and did the first A320 in December,” Chris Seymour, head of market analysis at Ascend by Cirium, told AIN. “They also plan to start converting at their Guangzhou facility.”
Lam said ST maintained a&nbsp;positive outlook for mid- to long-term demand in the P2F conversion market. The air cargo sector continues to experience&nbsp;strong growth, driven by e-commerce, time-sensitive and high-value cargo such as Covid&nbsp;vaccines, and massive backlogs in ocean shipping.
With a diversified global business, ST Engineering does not depend on one country, such as China, alone, said Lam. It serves clients from key air locations such as Shanghai, Beijing, Hanoi, Ho Chi Minh City, as well as Singapore. “We just set up our first physical footprint in Vietnam via a joint venture with Vietnam Airlines in recent years, so we will be focusing on ramping up our operations and growing our capabilities there,” he concluded.

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