SIA Engineering expands MRO as profit falls 6.1% in Q1

Safran will hold 51% of a JV to establish a full-fledged LEAP engine MRO shop in Singapore.

SIA Engineering Company (SIAEC) will establish a full-fledged CFM LEAP engine maintenance, repair, and overhaul (MRO) shop in Singapore through a joint venture (JV) with Safran Aircraft Engines, as the group expands its engine MRO capacity.

SIAEC said in a statement that it signed the JV agreement with Safran Aircraft Engines in June, under which Safran will hold a 51% stake in the JV, whilst SIAEC will have the remaining 49%.

The JV will integrate SIAEC's existing quick-turn maintenance services for Safran, forming the foundation for a future engine MRO facility in Singapore.

“This new facility will expand the engine shop visit capacity and offer more comprehensive support for both LEAP-1A and LEAP-1B engines as the global LEAP fleet grows,” the company said.

SIAEC's net profit after tax fell 6.1% year-on-year (YoY) to $40.3m in the first quarter of FY2026/27, as its share of profits from associated and JV companies declined 18.0% to $31.0m.

Share of profits from the Engine and Component segment fell $7.0m, or 19.2%, due to investment costs incurred for capacity and capability expansion, partly offset by higher engine shipments.

Group revenue fell 8.6% YoY to $327.6m, due to lower revenue from materials and a corresponding reduction in material costs. Excluding materials, revenue rose 4.2%.

Group expenditure fell 11.0% to $314.4m, driven by lower material and repair costs. This lifted operating profit to $13.2m, an increase of $8.1m from a year earlier.

MRO demand remained stable in the quarter, with SIAEC's Line Maintenance operations handling 2.9% more flights in Singapore than a year earlier, despite flight cancellations by some airline customers linked to the Middle East conflict.

SIAEC is also expanding its maintenance capacity in Malaysia. Its Base Maintenance Malaysia (BMM) facility completed its first heavy check at its first hangar in November 2025 and officially opened in May 2026.

Its second hangar is on track to become operational in the second half of FY2026/27, which will bring BMM's total capacity to six concurrent aircraft checks, providing additional capacity to supplement its hangars in Singapore and the Philippines.

“Demand for MRO services remains resilient amidst ongoing geopolitical tensions, supply chain constraints, and inflationary pressures,” the company said.

It added that it remains focused on operational flexibility, productivity, and cost control as the operating environment changes.

SIAEC also signed a non-binding memorandum of understanding with Air India on 3 July to explore MRO collaboration opportunities.

The discussions could include an MRO JV in India to serve the Indian and regional aviation markets.

“We remain confident in the fundamentals of the Asia-Pacific MRO market, supported by rising passenger traffic and continued fleet expansion,” SIAEC said.

It plans to expand its regional footprint, increase capacity, develop capabilities for next-generation aircraft, and strengthen its operations.

As of 30 June 2026, equity attributable to owners of the parent stood at $1.80b, up 2.4% from 31 March 2026, whilst total assets rose 1.8% over the same period to $2.31b.