ST Aerospace secured business worth S$1.1bn ($790m) during the first quarter of 2017 – more than the company achieved in any quarter since 2011 (prior sales figures are not available).
Asia’s biggest MRO provider won new and repeat contracts for line and heavy maintenance, component repair, engine overhaul and servicing, and logistics provision.
China represents a vital market for the Singapore-based company, which has partnered with Chinese airlines and government aviation bodies in regions across the country
In 2005 ST Aerospace began to offer heavy maintenance services through a 49-51 joint venture with China Eastern Airlines called Shanghai Technologies Aerospace Company (STARCO).
Then, in 2013, it opened another joint venture in the Pearl River Delta to extend its reach to airlines in Southern China.
Although ST Aerospace Guangzhou (STAG) launched without any confirmed base maintenance contracts, this year it opened a second hangar, taking capacity to one million man hours.
ST Aerospace is also busy in Europe, where it is building a new composite panel production plant to supplement the work of its German subsidiary, Elbe Flugzeugwerke.
The developments in China and Europe are classic examples of vertical and horizontal integration, as ST Aerospace adds new capabilities and increases market share in its core MRO business. The company also performs freighter conversion and has branched into aircraft seat production.
Rather than overreaching, this is what it takes to remain a major player in the global market for aircraft services. Lufthansa Technik, the market leader, secured new business worth US$6bn in 2016, while its revenue in Asia rose almost a quarter to $600m.
Thus ST Aerospace still has considerable ground to catch up: its new business for 2016 totalled US$1.8bn, though its recently announced contracts could indicate the start of a serious challenge.