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SIAEC Signs Off from Pratt and Whitney RRSP

SIA Engineering Company (SIAEC) announced its decision to terminate its involvement in the PW1500G engine risk-revenue sharing program (RRSP), previously managed through its subsidiary, NexGen Network (2) Holding (NGN2), in collaboration with Pratt and Whitney.

Exiting the RRSP entails a write-off of $25.1 million in net assets associated with the program, formerly known as the C-Series aircraft engine program. NGN2, which had a 1% share in the program, invested in the RRSP back in 2010.

Participants in the RRSP bear costs, risks, and revenues concerning the PW1500G geared-turbofan engine throughout its lifecycle, from design and development to production, post-certification engineering support, marketing, sales, and after-market services such as maintenance, repair, and overhaul (MRO).

This decision to exit the RRSP, made in agreement with Pratt and Whitney, was prompted by the program’s requirement for further capital injection. SIAEC aims to reallocate this capital to areas more in line with its growth strategy.

The RRSP provided benefits to Eagle Services Asia Private Limited (ESA), a joint venture (JV) between Pratt and Whitney and SIAEC, with respective stakes of 51% and 49%. These benefits included opportunities for new engine capability and MRO work for ESA, along with relevant investment support grants for developing new engine capability.

On March 28, shares in SIAEC closed at $2.26, remaining unchanged.

SIA Engineering Company Limited, a Singaporean entity specializing in aircraft maintenance, repair, and overhaul services across the Asia-Pacific region, operates as a wholly owned subsidiary of the Singapore Airlines Group. It was established in 1992 following the separation of SIA’s engineering division.

With certifications from over 20 airworthiness authorities, SIAEC’s extensive MRO network spans globally, encompassing six hangars in Singapore and three in the Philippines. This network offers turnkey integrated solutions to a diverse clientele consisting of international airlines and aerospace companies.

Originally derived from Singapore Airlines’ (SIA) Engineering Division, SIAEC has evolved over the years, leveraging substantial investments in capabilities, facilities, and equipment tailored to support SIA’s modern aircraft fleet. This strategic focus facilitated the development of MRO expertise and experience in cutting-edge aircraft technologies ahead of competitors.

In 1992, SIAEC emerged as a subsidiary of SIA, granting it increased autonomy to explore new global business opportunities. This shift encouraged heightened emphasis on productivity, efficiency, quality, and enhanced value-added services for customers. A significant milestone occurred in 2000 when SIAEC was publicly listed on the Singapore Exchange.

Presently, SIAEC offers comprehensive MRO services for both current and next-generation widebody and narrowbody aircraft. Its maintenance facilities provide a range of MRO services covering airframe, line, cabin, fleet management, components, and engines. At Singapore Changi Airport, SIAEC conducts line maintenance operations for over 60 airlines, ensuring punctual flight departures for its customers.

Strategic collaborations with leading OEMs (Original Equipment Manufacturers) and partners in airframe, component, engine, and modification sectors bolster SIAEC’s core competencies and market reach. Through joint ventures and subsidiary operations within its MRO network, SIAEC continues to expand and enhance its suite of integrated MRO services and network support for airlines globally.