SIA Engineering takes advantage of airframe OEM deals

It inked two agreements with Boeing in the past two years.

SIA Engineering Company (SIAEC)'s partnership with airframe original equipment manufacturers (OEM) could provide a first mover advantage to the group.

According to DBS Group Research analyst Suvro Sarkar, SIAEC incorporated a fleet management joint venture (JV) with Boeing in 2015, and in 2016 inked another airframe maintenance, repair and operations (MRO) JV with Airbus.

"These deals will give SIAEC a strong foothold in securing fleet management and MRO work in Asia Pacific derived from the airframe OEM’s total care programmes, which have been gaining traction with airlines," the analyst said.

Whilst MRO providers now have to carve out some of the pie to airframe OEMs, SIAEC’s JV agreements are a bet that the volumes allocated to the JVs will more than offset the sharing of profits.

"By positioning itself as an OEM partner early in the game, SIAEC should benefit in the long term from the territorial exclusivity granted to it," the analyst noted.