Mr S Iswaran at the MRO Asia 2008 Conference

SPEECH BY MR S ISWARAN SENIOR MINISTER OF STATE FOR TRADE AND INDUSTRY AT THE MRO ASIA 2008 CONFERENCE ON TUESDAY 14 OCTOBER, 1.15PM SUNTEC INTERNATIONAL CONFERENCE & EXHIBITION CENTRE

Distinguished Guests

Ladies and gentlemen,

Good afternoon

Introduction

I am pleased to join you at Aviation Week’s MRO Asia Conference 2008. This Conference has become an important event for aviation maintenance and safety experts from the Asia Pacific, top airline and government officials as well as MRO players to come together to share insights and exchange ideas on the MRO industry.

Challenging times for the Aerospace Industry

The aviation industry has faced significant challenges in recent times. Airlines have been hit by high fuel costs and several have already closed this year as it reached untenable levels. Other airlines have grounded their less fuel efficient aircrafts and cut back on routes. This has had a direct impact on the MRO market.

In spite of the weak immediate outlook for airlines and the MRO industry, the long term prospects of the aerospace industry remain positive. At July’s Farnborough Airshow, significant new orders for aircrafts continued to be placed with Boeing and Airbus, particularly from the emerging economies of the Middle-East, China and Russia. Demand has also come from airlines seeking to replace their fleets with more fuel efficient aircrafts.

The past few weeks vividly illustrate the uncertainties in the global economic environment. It has been a turbulent period for financial markets and the effects on the economy will be profound. On the other hand, the easing of fuel prices has provided some relief. Today’s forum is timely, and I trust it will stimulate meaningful deliberations on dealing with the challenges ahead and emerging stronger.

Positive long term prospects; Singapore continues to invest

Here in Singapore, we are also considering our response to the global crisis. Singapore’s Aerospace industry has a strong growth record, with a 13% compounded annual growth rate since 1990. We have developed a strong MRO cluster with a full range of aerospace MRO capabilities, including airframe maintenance, engine overhaul, component repair, structural systems repair and avionics systems repair.

To support continued growth, we took a decision in 2006 to develop the 300 ha SeletarAerospacePark as an integrated aerospace cluster. This will host MRO, manufacturing and business aviation activities. We have enjoyed strong support from the aerospace industry since SeletarAerospacePark was launched, with major investments announced by Rolls Royce, Pratt & Whitney, ST Aerospace, BJETS and others. The $320 million Rolls Royce engine assembly and test facility is particularly significant as it will be the first of its kind in Asia, producing engines for the Boeing 787 and Airbus A350XWB.

We are appreciative of the strong positive response we have had for Seletar. And so, in spite of the near term slow down in the industry, we are determined to proceed with infrastructure works at Seletar and with the extension of its runway. 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.

Singapore has a developed workforce of engineers, technicians and other professionals in the aerospace industry. Our institutes of higher learning host a variety of aerospace-specific courses, carefully tailored to the demands of industry. Temasek Polytechnic and Lufthansa Technical Training are collaborating to offer aircraft maintenance training, augmenting each other’s capabilities. UniSim, our university for working adults, has launched a new aerospace degree programme with CranfieldUniversity. These new initiatives will enhance the competence of our workforce, bearing fruit in a couple of years when the first students graduate. By that time, we are hopeful that the industry will have turned a corner and be on the path to recovery.

We are also preparing for the future at ChangiAirport. Singapore enjoys an established position as an air hub, and Changi is widely recognized as one of the best airports in the world. This position was reinforced by the opening of the new Terminal 3 at ChangiAirport this year, raising its total capacity to 70 million passengers a year.To further enhance the efficiency and competitiveness of the airport, the Government has recently decided to form a corporatized body to manage the airport. We believe this will position Changi and Singapore well for the future.

Conclusion

All this is evidence that Singapore remains committed to developing the aerospace industry and reinforcing our status as an air hub. These are important pillars of our economy and Singapore will continue to invest in the essential infrastructure and resources to support them. Over the next three days, I am sure that you will also be considering your response to the immediate challenges and the long term prospects for Aerospace MRO. I hope that you will experience open and active discussions, with the exchange of new ideas. I wish you all a successful conference.