Under the agreement, which is subject to various regulatory approvals, SIAEC will hold a 49% equity stake in the ‘Boeing Asia Pacific Aviation Services’ joint venture (2-page / 64 KB PDF), with the remainder held by Boeing.
Other terms of the transaction were not disclosed. However, both sides said the new company is expected to be formed by the end of 2014 and provide engineering, spare parts, and repair and maintenance services for Boeing airplanes.
SIAEC president and chief executive officer William Tan said the joint venture will be “a game changer for the airline industry”.
Tan said the initiative “will set new standards for aircraft reliability and utilisation and make fleet management solutions far more accessible, customisable and affordable for airlines”. Tan said aircraft ownership would also be made “much simpler”.
SIAEC is one of the world's largest fleet management service providers with line maintenance services at 34 airports in seven countries.
SIAEC said Boeing has signed contracts for fleet management support and services to cover the Singapore Airlines fleet of 27 777-300ERs and the Scoot fleet of 20 787 Dreamliners that are on order. Services for Singapore Airlines and Scoot will be provided through the new joint venture, which combines Boeing engineering management with repair and maintenance services from SIAEC.
The managing director of the Singapore Economic Development Board (SEDB) Yeoh Keat Chuan said the “complementary strengths of both companies will serve as a strategic competitive advantage for the venture to seize growth opportunities in this region”.
Keat Chuan said: “This investment will further strengthen Singapore’s position as the leading aerospace hub in Asia-Pacific, whilst offering Singaporeans rewarding and exciting careers with Boeing and SIAEC.”
According to the SEDB, Asia will account for one in three every new aircraft deliveries over the next 20 years. Singapore’s own Changi airport is set to double its capacity to serve 135 million passengers annually with two new terminals set to be in operation by mid-2020.
Singapore accounts for more than a quarter of Asia’s aircraft maintenance, repair, and overhaul services output in Asia, SEDB said.