The aviation industry is poised to be a story of recovery and growth in 2023 as flying activities continue to rise in volume. AVIATION ASSET MANAGEMENT We continued to grow our aviation asset management business by building up our portfolio comprising aircraft engines, freighter aircraft and passenger aircraft. Our assets under management grew from US$1b in 2021 to US$1.8b in 2022. We also intensified our efforts in marketing unique leasing solutions such as the bundling of aircraft leasing with MRO services. In addition, we entered into leasing partnerships with new customers, such as Raya Airways which placed a lease for four Airbus narrowbody P2F aircraft with us. The JV we set up with Temasek for freighter aircraft leasing continued to acquire feedstock aircraft and build up its portfolio with A320/ A321P2F aircraft. New aircraft assets included the world’s first A320P2F which was placed on lease with Vaayu Group. OUTLOOK There are encouraging signs that the aviation industry has decidedly turned the corner and is embarking on a steady growth trajectory. However, we continue to navigate the economic landscape with caution. Beyond COVID-19, there are other risks or challenges which portend some degree of disruption. The shortage of technician talent remains a challenge that raises the cost of maintenance and threatens fleet expansion projections. The imbalance in labour supply and demand will eventually be remedied by a combination of efforts from MROs and airlines to feed the technician pipeline and make efficiency gains, although this will take time. Supply chain disruption is another issue due to factors encompassing raw materials, logistics and inflation challenges. We expect to face continual challenges from securing freighter conversion kits to spare parts. While it is difficult to say how long these challenges will last, we are minimising impacts through rigorous efforts in diversifying our supply chain. These challenges notwithstanding, the aviation industry is poised to be a story of recovery and growth in 2023 as flying activities continue to rise in volume. There is room for further recovery of our MRO business, especially in the areas of engine and component MRO as demand has yet to recover to the pre-pandemic level. We also expect to see strong recovery by our manufacturing business as production volume continues to improve under sustained market demand for new aircraft deliveries. E-commerce, which is forecasted by industry experts to grow by 50 percent between 2021 and 2025, will continue to boost demand for freighter aircraft. E-commerce growth, when coupled with the replacement cycle of ageing freighters, will create a sustainable demand for dedicated freighters, long after air traffic has recovered to pre-COVID levels. There is room for further recovery of our MRO business, especially in the areas of engine and component MRO as demand has yet to recover to the pre-pandemic level. CORPORATE OVERVIEW PERFORMANCE REVIEW SUSTAINABILITY FINANCIAL REPORT 33
RkJQdWJsaXNoZXIy NjMyNDM=