ST Engineering operates across multiple industries. How does the aerospace segment compare to the rest of the portfolio?
The defense and public security and aerospace segments are equally large in revenue, making up around 40% each and serving a very diverse market. Within the Commercial Aerospace business we have three segments: the OEM (original equipment manufacturer), the MRO (maintenance, repair and overhaul), and the leasing segment.
For our manufacturing business, we are invested in aerospace programs like the nacelle systems for the Airbus A320neo, which is a significant business given the high demand for the A320neo platform. On the MRO side, we support airlines with airframe, component and engine services. We are constantly expanding our capabilities, most recently introducing maintenance support for the CFM LEAP engines. In leasing, although we are not very big, we are involved in engine leasing as well as passenger and freighter aircraft leasing.
Aviation MRO is highly labor-intensive - how do you hope to build and retain human capital?
Aviation MRO, in particular airframe maintenance, requires a lot of skilled labor. Post-COVID-19, the global industry is facing challenges caused by labor shortage and wage inflation. To combat these, we are collaborating with educational institutions and training institutes to develop the next generation of aviation talent and fortify our workforce recruitment pipeline. We are also recruiting foreign workforce to augment the local talent pool depending on where our facilities are based. In Asia Pacific, we have access to a large labor pool in China which helps with our operations in the region.
To enhance the productivity of our workforce, we have embraced smart technology in our MRO processes. By making use of digitization, automation and robotics on the shopfloor, we can minimise time-consuming, repetitive work. This improves consistency in quality and safety while giving our technicians more time to focus on higher-value tasks such as analysis and process improvement. Moreover, the use of robotics enables our senior workers to leverage their experience without worrying about performing physically demanding tasks. For instance, on our shop floors, we have introduced automated systems to retrieve and transport material to and from our warehouses, streamlining our logistics operations. We have also increased the use of robotics to automate routine tasks that can now take place 24/7.
What technologies are you most excited about implementing in both your solutions and ST Engineering’s operations in 2024?
We want to provide MRO services at the lowest cost, highest quality, and in the shortest turnaround time; technology has helped us in achieving that. We are an early adopter of smart technologies such as automation and digitization in our MRO solutions, and we are continuously exploring how these and other new technologies such as generative AI can further enhance our work.
We have also invested in 3D printing technology to manufacture parts for aftermarket support and MRO work. When parts belonging to our customers’ aircraft are worn out or damaged, we use additive manufacturing solutions to replace them. Sometimes, we even redesign the parts for improved performance and lifespan. Items that we have manufactured for our customers include cabin components, aircraft seat parts, and door handles.
We also use drones to automate aircraft inspections, and analyze the images captured by the drones to check for corrosion, dents, or surface issues. To reduce reliance on manual checks, we are aiming to adopt imaging technology for intelligent inspections. We are also very excited when it comes to pushing out new innovative solutions for our OEM business. We formed a JV called ST Engineering AirX in 2023 to tap the potential of Wing-in-Ground (WIG) technology and commercialise the AirFish family of WIG craft. By leveraging aerodynamic forces and air pressure generated between the aircraft and the surface of the water, the AirFish craft can travel at 90 knots, three times the speed of existing marine craft. This significantly reduces travel time, making it a convenient mode of transportation for luxury travel and maritime public transport. In 2024, our focus is on the classification and certification of the AirFish, which is a vital step towards its entry into service.
The application of new technologies requires regulatory approval, which takes time. Does this present the biggest barrier to the adoption and modernization processes?
Regulation is the gatekeeper for public safety; it ensures things are done right and maintains public trust. Without regulation, operators could cut corners, risking public safety and the industry's survival. We have seen from time to time from the news that complacency in aircraft maintenance and regulation has led to safety issues and lapses. Even if high demand could be a contributing factor, it should never be an excuse for cutting corners. Just like cooking a meal, you wouldn't serve it raw to save time.
For this reason, we appreciate the work of regulators and work with them closely to assure them of the quality of our solutions. We sometimes even develop industry guidelines together by providing our insights as a service provider. On our end, we always train our technicians and mechanics to always deliver the highest quality, no matter the level of demand.
ST Engineering joined the Singapore Low Carbon Network in 2021. What do you foresee as being the main limitations to the pursuit of your 2030 sustainability targets?
Singapore has limited land and isn't very windy, which makes generating wind energy unfeasible here. However, Singapore is very sunny which allows us to harness solar energy. To capitalise on this, we have installed solar panels on the hangar roofs of all our facilities in Singapore, which generate about 30% of our energy needs for our operations. Besides solar panels, we have also invested in new-generation compressors and energy-efficient measures at our facilities.
As we continue to drive operational efficiency and advance towards better sustainability outcomes, we are always seeking partners with the right technology and resources that can operationalise ideas and customise them to our exact needs. For instance, in engine MRO, we are keen to work with solution providers with innovative carbon capture technologies that can be used to capture and reduce emissions created from engine testing at our test cells.
