SINGAPORE: SIA Engineering Company (SIAEC) has exited from the PW1500G engine risk-revenue sharing programme (RRSP), previously managed through its subsidiary, NexGen Network (2) Holding (NGN2), in collaboration with Pratt and Whitney.
The Edge Singapore reports that SIAEC’s decision to exit the RRSP entails writing off $25.1 million worth of net assets associated with the programme, which was originally known as the CSeries aircraft engine programme.
NGN2’s involvement in the RRSP dates back to 2010 when it held a 1% share before the recent exit.
Under the RRSP, participants like NGN2 shared the costs, risks, and revenues associated with the PW1500G geared-turbofan engine.
This included various stages from design and development to production, post-certification engineering support, marketing, sales, and aftermarket services, including maintenance, repair, and overhaul (MRO) services.
The decision to exit the RRSP was reached after careful consideration and agreement with Pratt and Whitney.
SIAEC highlighted the need for further capital injection into the programme, prompting the strategic move to redirect resources to areas better aligned with its growth strategy.
However, this departure from the RRSP doesn’t leave SIAEC without benefits.
Eagle Services Asia Private Limited (ESA), a joint venture between Pratt and Whitney and SIAEC based in Singapore, reaped the rewards from NGN2’s participation in the RRSP.
With Pratt and Whitney holding 51% and SIAEC 49% stakes in ESA, the programme provided opportunities for new engine capability development and MRO work for ESA.
SIAEC explained that, after careful deliberation and with the agreement of Pratt and Whitney, they decided to leave the RRSP because more money was needed for it.
By withdrawing from the RRSP, SIAEC aims to deploy capital resources to other avenues that better suit its growth trajectory. /TISG
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