Flying high with Seletar makeover

Source : Business Times - 3 Mar 2009

TUCKED in the north-eastern corner of Singapore, Seletar Airport’s humble appearance belies its grand beginnings. Built just before World War II, it is the country’s first international civil airport and it has lasted to this day even as international air traffic moved to Kallang, Paya Lebar, and finally Changi over the years.

Seletar continues to operate as a base for flight training and aerospace maintenance, repair and overhaul (MRO). Though relatively quiet today, the area could soon return to the hustle and bustle of yesteryears when JTC Corporation’s aerospace park takes shape.

As the government agency spearheading Singapore’s industrial growth, JTC has earmarked 300 ha of land for Seletar Aero+sPace (SAP). The strategic project, which began in 2006, aims to enhance the country’s position as a leading MRO service centre in Asia Pacific.

Since 1990, Singapore’s aerospace industry has grown at a compounded rate of 13 per cent annually. There is a strong MRO cluster offering a full range of services including airframe maintenance, engine overhaul, component repair, structural systems repair and avionics systems repair.

As the industry grew, aerospace companies in Singapore and new investors started seeking space for expansion and this led to the creation of SAP.

Undoubtedly, the aviation industry today is facing significant challenges and the MRO market has not been spared. Hit by high fuel costs earlier, airlines now have to contend with the global economic slowdown. Some have grounded less fuel-efficient aircraft and cut back on routes.

But despite the weak immediate outlook, the aerospace industry’s future remains promising, said Senior Minister of State for Trade and Industry S Iswaran at an MRO conference last October. ‘We are determined to proceed with infrastructure works at Seletar. . . This will position us well for the upturn, when it comes.

‘We see this as the occasion to prepare the infrastructure and manpower capabilities needed for future growth, especially since we remain positive about the long-term prospects of this industry.’

The SAP clusters

JTC completed the SAP masterplan in June 2007 and the park will accommodate four key activities - aerospace MRO, design and manufacturing, training, and business aviation and general aviation. The clustering concept allows customers to access a whole suite of aviation services and also allows companies there enjoy synergy and economies of scale.

Singapore already has strong MRO capabilities in commercial wide-body aircraft. To diversify into new market segments, Seletar will host MRO activities for the growing narrow-body and smaller aircraft market.

When it comes to design and manufacturing work, new business opportunities are emerging. US and European companies are increasingly looking for cost-competitive yet reliable manufacturing locations; companies that are developing new aircraft types such as microjets are also looking for new locations to produce and assemble them.

The SAP will also become a regional aviation campus when leading aeronautical training institutions set up shop there. The training of pilots and crew, aviation staff such as airport managers, and aerospace engineers and technicians will benefit both the local and regional aviation industry.

Seletar Airport will also have an important role to play in supporting business and general aviation. With the emergence of private wealth management and new tourist attractions such as the integrated resorts, there will be increased business aviation traffic in Singapore. The privacy which Seletar Airport offers will suit high net worth individuals coming here.

The SAP masterplan

Under the masterplan, Seletar Airport will be upgraded to include an extended runway, a new taxiway, aircraft parking aprons and an instrument landing system. JTC has reserved about 140 ha of land around the airport for the rest of SAP, and surrounding utilities and roads will be enhanced to meet the requirements of aerospace companies.

Development began in November 2007 and included the construction of a new road and a substation. According to JTC last year, phase 1 of SAP was fully allocated to new tenants Rolls-Royce and Pratt & Whitney, and to existing companies ST Aerospace and Jet Aviation.

‘We have enjoyed strong support from the aerospace industry since SAP was launched,’ said Mr Iswaran.

Phase 2 of the SAP is just beginning to take shape and will include the development of a new multi-storey building to house aerospace-related businesses that are not runway-dependent, such as those involved in aviation insurance, flight chartering, aircraft financing and leasing.

JTC will retain some colonial ‘black-and-white’ residences in Seletar. It will also convert some of the heritage buildings into offices, training classrooms, trainee dormitories and commercial outlets. The SAP will offer a mix of entertainment and food and beverage establishments to inject vibrancy into the community.

When fully completed in 2018, the SAP and its suite of aerospace-related activities will create more than 10,000 jobs and contribute more than $3 billion annually to the economy.

‘Singapore remains committed to developing the aerospace industry and reinforcing our status as an air hub,’ Mr Iswaran reiterated. ‘These are important pillars of our economy and Singapore will continue to invest in the essential infrastructure and resources to support them.’