Singapore’s maintenance, repair and overhaul (MRO) industry has been moving up the value chain by doing more design engineering work, putting it in a different league in this lucrative business.
Thus Thailand’s efforts to penetrate the business segment does not impact Singapore, nor does it diminish Singapore’s potential.
In an interview in the Malay Mail published in the Malaysian daily’s Money pages, Francis & Low managing director Leithen Francis told explains why Thailand’s move to develop its MRO will not impact on Singapore.
Singapore and Thailand may not necessarily be competing directly against each other in the MRO sector, as they are targeting different segments of the MRO sector, Leithen said.
He said, for example, Singapore’s ST Aero has partnered with Airbus to develop a cargo conversion programme for the A330.
The city-state is also now home to Rolls-Royce, which assembles Trent 900 and Trent 1000 engines for the global market. Rolls Royce Singapore is also helping to develop the Trent 7000 engine that powers the new A330Neo.
“Singapore has done very well in attracting original equipment manufacturers (OEM) to establish MRO facilities in Singapore.
“The OEM MRO companies are less concerned about price and are more concerned about quality and consistency. Design engineering work is also less price sensitive, as very few countries have the skilled personnel who can undertake such work,” he said.
While Singapore has been carving out its niche in design engineering with its skilled workforce, Thailand is home to a large domestic aviation market and has good connections to Laos, Myanmar, Cambodia and Vietnam.
Leithen said Thailand’s strength is it the large number of airports that can be developed as centres for MRO.
“Also, MRO companies can draw business from the Thai domestic market and from neighbouring countries.
“Thailand has lower wage rates, so MRO companies wishing to undertake work where a lot of man hours are involved may be tempted to do the work in Thailand.
“For example, airframe heavy checks are labour intensive and it’s a segment of the MRO market that is more price sensitive,” he said to Malay Mail in an email interview.