The Singapore aerospace industry is experiencing a resurgence, fuelled by a surge in global air travel demand. The industry saw impressive growth in the first quarter of 2024, and this trend is expected to continue into the second quarter.
Strong Start to the Year
Industry Output: Data from the Ministry Trade of Industry’s Economic Survey of Singapore First Quarter 2024 paints an encouraging picture. The aerospace sector saw an impressive 25.4% year-on-year growth in Q1 2024, driven by increased demand from commercial airlines for aircraft parts and MRO (Maintenance, Repair, and Overhaul) services. In contrast, the broader manufacturing sector contracted by 1.8% (MTI, May 2024).
The positive momentum continued in April 2024, with the aerospace sector expanding by 8.2% year-on-year, according to the Singapore Economic Development Board (EDB). The industry is now operating well above pre-pandemic levels and exhibiting significant growth with the industry’s monthly output from January to April 2024 consistently surpassed 2019 figures by 28 to 35 points.
Passenger Traffic on the Rise
Changi Airport, Singapore’s main air hub, has also seen a recovery in air travel.
Passenger Movements: Passenger traffic (less transit) at Changi Airport rose by 27.1% year-on-year in the first quarter of 2024 (MTI, May 2024), though this was against a relatively lower base of 1Q2023 when the volume of air passenger traffic remained below pre-pandemic levels. 6.5 million passenger movements were recorded at Changi the first quarter of 2024 (CAG, April 2024), surpassing pre-COVID levels from the first quarter of 2019 by 0.7% (MTI, May 2024).
Passenger traffic in April continue to show improvements at 5.4 million, which is 17.4% more than April 2023 but 96.8% of pre-pandemic figures from April 2019 (CAG, April 2024). In comparison, Changi Airport handled 5.43 million, 5.35 million, and 5.73 million passenger movements in January, February, and March of 2024, respectively. These figures represent 96%, 104.3%, and 101.7% of the passenger traffic recorded in the corresponding months of 2019 (CAG, April 2024).
Aircraft Movements: Reflecting the recovery in air travel, the number of aircraft landings increased by 20.5% year-on-year to 44,674 in the first quarter of 2024 (MTI, May 2024). However, total aircraft movements were 89,400, still 94% of the levels recorded in Q1 2019 (CAG, April 2024). April 2024 saw a 29,100 aircraft movements, 10.6% higher than April 2023 but 7.5% lower than 2019 figures (CAG, April 2024).
Changi Airport was the world’s fifth busiest airport by international passenger volume in 2023. A report released by Airports Council International placed Changi as one of only three airports in the Asia Pacific in the top 10. According to OAG, Changi was the world’s third busiest international airport by seat capacity in March and April 2024.
Industry and Economic Outlook
Looking ahead, the outlook for the aerospace sector remains positive. With strong demand for aircraft parts and MRO services, coupled with a rebound in air travel, the sector foresees an increase in aircraft maintenance jobs. A net weighted balance of 88% of aerospace firms expect sustained output levels in the second quarter of 2024. This optimism is supported by a positive economic outlook with growth in major markets like the US, China, South Korea, and Taiwan.
Against this backdrop, Singapore’s manufacturing and trade-related sectors are also expected to see gradual growth over the year. The recovery in air travel and tourism will continue to boost the air transport and aerospace sectors. Additionally, the industry is buoyed by significant investments, with commitments totalling over S$750 million on more than ten projects over the next three to five years, as announced by the Economic Development Board (EDB) earlier this year. These investments signal substantial growth opportunities for the industry.
Despite the current optimism, potential external headwinds warrant close attention:
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