Escalating headwinds pound aviation MRO providers after poor Q2 numbers

Engine workshop visits are dwindling.

Aviation maintenance services providers cannot look forward to improved profit prospects in the third quarter after posting mostly poor Q2 results.

OCBC Investment Research noted that MRO providers will continue to be impacted by lower revenue from their core aircraft and engine repair businesses.

Workshop visits are dwindling due to the longer maintenance cycle of newer aircraft and engine models, as well as the phasing out of older engine models without new product replacement.

In the second quarter, ST Engineering’s core earnings fell 4.9% YoY to $135.3m while SIA Engineering Company’s (SIAEC) core PATMI dropped 13.6% to $41.3m. Only SATS managed to deliver growth during the quarter, with core profits up 8.5% to $47.1m on back of stringent spending cuts.