ST Engineering awarded $28m MBHTM contract by Spring Airlines Japan

Involves repair support for Boeing 737-800s.

In a release, Singapore Technologies Engineering Ltd’s (ST Engineering) aerospace arm Singapore Technologies Aerospace Ltd (ST Aerospace) announced that it has been awarded an exclusive component Maintenance-By-the-Hour (MBHTM) contract worth US$28m (about S$32.25m), by Spring Airlines Japan. This contract involves component repair management support for 22 of Spring Airlines Japan’s Boeing 737-800.

Under the agreement, ST Aerospace will provide support for component repairs, warranty management, as well as consignment and pool access to its global rotables inventory pool. The new contract is expected to commence in the second half of 2013 and stretch over eight years.

“We are happy to find a strong partner in ST Aerospace to support our new aircraft fleet. As we establish our operations in Japan and internationally, we are confident that ST Aerospace will provide us with reliable and cost-effective services, for many years to come," said Ugai Hiroshi, CEO, Spring Airlines Japan.

“The growing partnership with Spring Airlines, which now extends to Spring Airlines Japan, is extremely important to us as it is a testament of Spring Airlines’ confidence in ST Aerospace’s Maintenance-By-the-Hour services. Working through our global MRO network, we will continue to deliver the high level of quality support they have come to expect of us," said Chang Cheow Teck, President, ST Aerospace.

ST Aerospace currently supports Spring Airlines Japan’s parent airline Spring Airlines on an existing component MBHTM programme for 78 Airbus A320 aircraft. Besides component support, ST Aerospace has also provided airframe services, import, export, warehousing and logistics services to Spring Airlines through its global maintenance, repair and overhaul (MRO) network.

"This contract validates the growing popularity of ST Aerospace’s MBHTM support programme for the Boeing 737 and Airbus A320 family of aircraft. Through its global MRO network and an extensive pool of rotables, ST Aerospace today provides integrated engine and component support for over 800 aircraft on the MBHTM basis for a large number of airlines globally," said ST Engineering in the release.

Based in Tokyo, Spring Airlines Japan is a newly established Japanese subsidiary of the largest Chinese low cost carrier, Spring Airlines. Headquartered in Shanghai, Spring Airlines operates over 50 international and domestic routes covering a network of more than 30 cities across China, Japan and Thailand.

This contract is not expected to have any material impact on the consolidated net tangible assets per share and earnings per share of ST Engineering for the current financial year.