Asia’s aerospace industry plots rebound at air show

Despite developing concerns about labour shortages, rising costs, and supply chain issues, attendees at the 2016 Singapore Airshow expressed greater hope as the hard-hit Asian aerospace business begins to revive.

Even on Tuesday, the busiest day, only a few thousand people appeared to be at the show, according to attendees. Organisers had estimated attendance of more than 13,000 ahead of the four-day show – still a shadow of previous years – but attendees said that even on Tuesday, the busiest day, only a few thousand people appeared to be at the show. The final figures are still being collated, according to the organisers.

Nonetheless, return visitors like Eric Noel, an executive at an Arizona flight training centre, said the atmosphere was livelier than the previous show in February 2020, when late exhibitor dropouts due to the emergence of COVID-19 left empty spaces and half-finished booths, giving the display hall an eerie feel at a time of significant market uncertainty.

On Thursday, showgoers braved the sweltering midday sun to watch the final series of aerial displays, which included a flyby of a United States B-52 bomber, a type that originally flew in the 1950s.

Although the poor turnout was a great example of the destructive effect that rigorous health and border controls have had on the aviation industry over the last two years, this year’s show was the largest event of any sort in Singapore since the onset of the pandemic.

However, there is hope for a reopening in Asia, with host country Singapore stating on Wednesday that quarantine travel from more countries will be allowed after an initial halt when the Omicron type was discovered late last year.

“People want to come back face to face because we’ve all found out Zoom is fine, but it doesn’t make it happen,” said Domhnal Slattery, CEO of aircraft lessor Avolon, at the conference.

On Wednesday, his company signed a lease agreement with AirAsia Aviation Group, which plans to create an air ridesharing service in Southeast Asia.

Due to the decline in passenger travel during the epidemic, Asian airlines have had to rely on the cargo sector to stay afloat, and freight has been the star of the show in terms of large deals.

On Wednesday, Singapore Airlines (SIAL.SI) completed an order for seven Airbus (AIR.PA) A350 freighters, while Etihad Airways made a preliminary order for the same model.

Singapore Technologies Engineering (STEG.SI) also received more orders for passenger-to-freighter conversions, which has kept its hangars and personnel busy throughout the passenger traffic slowdown.

There were no large acquisitions in the defence sector, but manufacturers were optimistic about a recovery as Asian countries emerge from the economic ruins of COVID-19 and seek cost-effective ways to strengthen their forces.

As demand continues to recover, concerns about cost inflation and supply chain issues are emerging among commercial and defence manufacturers.

Sean Padfield, senior vice president of aerospace at SCHROTH Safety Products, said lead times for parts from his company’s suppliers had increased, making it more difficult to satisfy client obligations.

On the show floor, he remarked, “We’re really trying to smooth out by adding some robustness to our supply chain, like having different vendors for the same parts.” “However, in the aviation space, we’ve discovered that some of these parts are so specialised that getting another supplier up and running to provide at the same quality and quantity takes a long time.”

Other labour issues have arisen as a result of large workforce reductions made when demand fell in 2020, causing some workers to retire or change careers.

“There is a general labour scarcity, and the only way to attract labour back to work is to raise rates,” said Kailash Krishnaswamy, Spirit AeroSystems’ senior vice president of aftermarket services (SPR.N). “We are attempting to pass on that pricing to the client whenever possible. If at all possible, we are attempting to incorporate automation where it is required.”

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