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How Is COVID-19 Impacting The Aircraft MRO Industry In SEA?

How Is COVID-19 Impacting The Aircraft MRO Industry In SEA?

Global air traffic has practically been brought to a standstill and the global airline industry has plummeted as countries worldwide implement travel restrictions and fleet groundings to curb the spread of the coronavirus.

Airlines in Asia Pacific will suffer a large revenue drop of US$113 billion in 2020 compared to 2019, and a 50 percent fall in passenger demand in 2020 compared to 2019 with the worsening COVID-19 crisis, according to the International Air Transport Association (IATA). Furthermore, IATA expects a $314 billion drop in total world carrier earnings this year. Here are some of the measures in the region:

  • Singapore Airlines has grounded 96 percent of its approximately 200-plane fleet on March 23 and resuming of operations is unclear.
  • Thai Airways has cancelled all international flights and transferred flights from Bangkok to Phuket, Krabi and Chiang Mai to its sister company Thai Smile Airways. The cancellations will last until May 30.
  • Philippine Airlines and Cebu Pacific flights have been suspended until May 15. The airlines are committed to resume operations starting May 16, 2020, depending on government mandates and regulations.
  • Malaysia Airlines suspended flight operations across its network until May 2020 for domestic and June 2020 for international services.
  • Indonesia commercial flights—domestic and international—are banned until June 1
  • Vietnam’s Jetstar Pacific has suspended international flight and cut back domestic flying

The demand for Maintenance, Repair and Overhaul (MRO) services are high dependant on the size and flight activity of global fleets. With grounded aircrafts, demand for these services diminishes and MRO providers and spare parts suppliers will suffer, according to a report by Roland Berger.

The original forecast for MRO spending in 2020 has been adjusted with a 59 percent drop for the region—from US$91.2 billion to US$42.7 billion (Oliver Wyman). Major players such as Boeing are switching its focus to defence from commercial flights to weather the crisis while Airbus has postponed ramp up of commercial aircrafts (Globaldata). Furthermore, Airbus has recently dropped out of a joint venture with Thai Airways International for the development of a 11-billion-baht MRO facility at Thailand’s U-Tapao Airport due to the impact of COVID-19.

Despite the bleak outlook, there is hope for the industry with global efforts. Companies like Rolls-Royce has established a COVID-19 data alliance to kickstart economy into recovery. Moreover, general aviation is playing an active role in the fight against the pandemic by providing transport of medical supplies and key personnel.

 

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As the pandemic is still evolving, what is the future of the aviation and MRO industry? How is the situation in your region? How have you been impacted? What do you think are some strategies which could help this sector recover from the impact? 

Do send us you insights and drop us a note at  [email protected]!

 

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ST Engineering Drops Dormant Subsidiary From Aerospace Arm

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Bombardier Invests S$85 Million To Expand Singapore Service Centre

Thailand Receives Boost To Become Regional Hub For Aircraft MRO

Lufthansa Technik Philippines May Cease Operations Due To Tax Reform

 

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Global Metal Stamping Market Forecast

Global Metal Stamping Market Forecast

According to Research And Markets, the global metal stamping market is projected to grow at a CAGR of 3.9 percent from 2018 to reach USD 289.2 billion by 2023. Contributing factors for this growth include rising urbanisation and industrialisation, growth of the automotive industry, increasing demands from the aerospace and aviation industry and a rise in technological advancements. To add to this trend, the increased adoption of sheet metal across manufacturing industries and the blooming of metal stamping facilities has further supported the metal stamping market. However, the emergence of plastics and composite materials have also hindered market growth.

Blanking processes currently hold a huge market share and this can be attributed to the popularity of the technique among the automotive, aerospace and aviation and consumer electronics sector as this is a process that can mass produce precise and superior quality metal work pieces in large volumes at low costs. Similarly, the application of metal stamping in the automotive industry is highly popular, especially in China and India as both countries are experiencing rapid technological advancements and possess a large number of automotive metal stamping companies.

Growth of the market in Asia Pacific is expected to continue as the region held the largest share of the global metal stamping market in 2017, followed by Europe and North America. This can be attributed to factors such as the displacement of manufacturing from the west to the east, rising regional industrialisation,increased investment inflows and industrial growth across numerous sectors.

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Vietnam’s First Aircraft Engine Component Factory Has Began Operations

Vietnam’s First Aircraft Engine Component Factory Has Began Operations

Vietnam’s first aircraft engine parts factory has began operations. The factory which is an the investment of South Korea’s Hanwha Aerospace company is located at the Hoa Lac Hi-tech Park in Hanoi and will reach its full scale operation capabilities in January 2019.

Currently, Hanwha is the only aircraft engine maker in South Korea and is recognised as one of the world’s top 10 most technologically advanced aerospace companies. Thus, it is expected that the company’s investment in Vietnam will facilitate the development of Vietnam’s aviation and precision mechanical industries. Additionally, it is projected that by 2024, the factory in the Hoa Lac Hi-tech Park would have around 900 employees with an investment capital of US$370 million, symbolising a strong technological transfer between South Korean and Vietnamese enterprises and enabling an advancement towards the development of high technology capabilities within Vietnam.

In addition to its main facility currently in Changwon, South Korea, Hanwha Aero Engines is the second production base of Hanwha Aerospace.  Therefore, this factory is a major part of the South Korean engine marker’s plans in terms of increasing its market share of civil aircraft engine parts to about US$ 879 million and leading the aircraft parts processing industry by 2025.

According to Minister of Science and Technology, Chu Ngoc Anh, the Hoa Lac Hi-tech Park has 87 investment projects as of now and possesses a registered capital of US$3.34 billion. However, the Hanwha brand name would lay the foundation for Hoa Lac to attract more hi-technology companies from other countries which would contribute significantly to Vietnam’s science-technology capabilities.

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