SIA Engineering braces for turbulent 2H16 as competition heats up

It has lost its sole Centre of Excellence status.

It’s getting more crowded in the aerospace engineering business, and it’s not exactly good news for SIA Engineering.

According to a report by UOB Kay Hian, the increased pressure in the market is likely to result in the company’s 2HFY16 and FY17 earnings.

UOB Kay Hian says one indication that competition is heating up is SIAEC lost its status as the sole Centre of Excellence in Asia Pacific for the maintenance of Trent engines.

“In addition, we expect SIAEC’s airframe maintenance revenue to decline further due to additional capacity from third-party maintenance, repair and overhaul (MRO) providers in the Philippines and Indonesia,” UOB Kay Hian said.

Meanwhile, UOB Kay Hian added that other risks for SIA Engineering include lower-than-expected staff costs and higher-than-expected quantum of work from SIA.