(SINGAPORE) – A new joint venture will establish a full CFM LEAP engine maintenance, repair and overhaul shop in Singapore, as SIA Engineering Company (SIAEC) moves to expand its engine servicing capacity despite reporting a fall in quarterly profit.
SIAEC signed the joint venture agreement with Safran Aircraft Engines in June. Safran will hold a 51 percent stake in the venture, while SIAEC will own the remaining 49 percent. The new entity will take over SIAEC’s existing quick turn maintenance services for Safran, using this work as the base for a future engine maintenance, repair and overhaul facility in Singapore. The company said the new facility will increase engine shop visit capacity and provide more complete support for both LEAP-1A and LEAP-1B engines as the global LEAP fleet expands. LEAP engines are a family of high bypass turbofan engines developed by CFM International, a joint venture between Safran Aircraft Engines and GE Aerospace.
Net profit after tax for the first quarter of the 2026/27 financial year fell 6.1 percent compared to the same period a year earlier, reaching S$40.3 million (US$31.2 million, £24.5 million). The decline was driven by an 18.0 percent drop in the share of profits from associated and joint venture companies, which fell to S$31.0 million (US$24.0 million, £18.8 million). Within this, the share of profits from the Engine and Component segment dropped by S$7.0 million, or 19.2 percent. The company attributed this to investment costs for capacity and capability expansion, partly offset by higher engine shipments.
Group revenue fell 8.6 percent year on year to S$327.6 million (US$254.0 million, £199.1 million). This was due to lower revenue from materials and a matching reduction in material costs. When materials are excluded, revenue rose 4.2 percent. Group expenditure fell 11.0 percent to S$314.4 million (US$243.7 million, £191.1 million), helped by lower material and repair costs. As a result, operating profit rose by S$8.1 million to reach S$13.2 million (US$10.2 million, £8.0 million).
Demand for maintenance, repair and overhaul services remained steady during the quarter. SIAEC’s Line Maintenance operations handled 2.9 percent more flights in Singapore than a year earlier, even with flight cancellations by some airline customers linked to the conflict in the Middle East.
The group is also expanding its maintenance capacity in Malaysia. Its Base Maintenance Malaysia facility completed its first heavy check at its first hangar in November 2025 and officially opened in May 2026. A second hangar is on schedule to begin operations in the second half of the 2026/27 financial year. This will bring total capacity at the Malaysian site to six aircraft checks at the same time, adding extra capacity to support the company’s hangars in Singapore and the Philippines.
The company noted that demand for maintenance, repair and overhaul services remains resilient in the face of ongoing geopolitical tensions, supply chain constraints and inflationary pressures. It added that it continues to focus 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 opportunities for collaboration in maintenance, repair and overhaul. The discussions could lead to a joint venture in India to serve the Indian and regional aviation markets.
The company said it remains confident in the underlying strength of the Asia Pacific maintenance, repair and overhaul market, supported by rising passenger traffic and continued fleet expansion. 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 S$1.80 billion (US$1.40 billion, £1.09 billion), up 2.4 percent from 31 March 2026. Total assets rose 1.8 percent over the same period to S$2.31 billion (US$1.79 billion, £1.40 billion).