Podcast: Singapore Airshow Special

After jumping through numerous hoops, Aviation Week editors made it to the 2022 edition of the Singapore Airshow. Listen in as they give their takes on the event and discuss the key themes in defense and commercial so far.

Don't miss a single episode. Subscribe to Aviation Week's Check 6 podcast in Apple Podcasts, Google Podcasts, Spotify and Stitcher.

Rush transcript:

Thierry Dubois:

The aircraft you just heard was a Boeing 777-9 making its debut here at the Singapore Airshow. I’m Thierry Dubois, ShowNews editor in chief, and I’d like to welcome you to this special edition of the Check 6 podcast where we’ll be highlighting the key themes in commercial and defense. I’d like to start by turning to our defense editor, Steve Trimble. Steve, what is your general impression of the show?

Steve Trimble:

The general impression is that we're here. So we are here, there's not a whole lot of other people here at this show. The exhibit halls are a shell of their former self. The static displays are fairly depopulated. There's not been a lot of that steady stream of press releases that we've come to expect at these air shows where we're just inundated in announcements, some a lot more important than many others. It's been few and far between for those things. That said, there's still people to talk to. I've had some really good interviews today and talking with very high-level folks of various companies all around the world. That's what you come to the show to do. There is stuff to do here and news happening, but it's just not at the same level or rate that we knew before the COVID situation entered our lives.

Thierry Dubois:

Jens, you are one of our commercial editors. You had numbers?

Jens Flottau:

Yeah. To put some perspective on this, two years ago, when we were here at the show, there were 30,000 trade visitors attending. This year it's 13,000. So it's about a third of what was already a crisis show. And if you look at the numbers of companies that are attending, organizers say it's close to 600 this year when it was a little more than 900 two years ago. There's a huge impact. And I'm curious to see what it's going to be like two years from now.

Thierry Dubois:

So that's a big difference also from the Dubai show a few months ago, which was busier than expected. It's quite the opposite here. We also have Chen Chuanren who is our local correspondent. Chen, from a local perspective, what's your takeaway from the show?

Chen Chuanren:

I think despite the limited press releases that our editors have mentioned, I think the level of announcements is a good indication of what the entire industry in the region is moving towards too. From ST Engineering, we have heard at least two passenger-to-freighter conversions deals. One on the world's first A320 and another on 12 A330s, P2Fs to a leasing company. Even on the defense side, we see the Singapore air force field is the latest modified H225 helicopter and even a joint venture between IAI and ST Engineering on the Blue Spear anti-ship missile. So I think from the point of view, it is still quite an exciting show because there's still new stuff to see, especially from a local perspective.

Thierry Dubois:

So Steve, would you like to pick up on this, despite the show being generally slow, there are still announcements, new products being exhibited?

Steve Trimble:

Well, sure. Just on the defense side, I should start by saying, it's a historic day for Singapore in the defense world. It's the 80th anniversary of the fall of Singapore. And it sort of underscores the island's commitment to defense and self-defense and self-reliance. And you could sort of see that in the flying displays and so forth, but at a broader level, the biggest activity is going on sort of the periphery of Singapore in the region. The biggest, being just last week, Indonesia, what they planned to do is buy 42 Dassault Rafale fighters. Well, on the same day, getting the state department notifying Congress of a potential sale of even more F-15s. And this sort of is part of this really kind of weird trend in the region where there's all this interest and still the sort of awkward ways of the doing it or a means to get there.

            So in Indonesia's case, very likely they're going to use private banking, private financing to raise the money, to acquire these fighters both on the US side and the French side if they actually do consummate all these deals. You have other countries looking at fighters, Singapore, for example. They will be talking about with their F-16 upgrade program, they're upgrading F-16s at the same time, they ordered four F-35Bs and trying to figure out how if you're upgrading F-16s, but also ordering four and four's an unusual number of F-35s to order, how that's going to play out. So those are the things we're looking at. Royal Thai Air Force is talking about buying fighters, Malaysia's interested in the Tejas, which is being displayed here. It's competing with the Hürjet, which is on display in the exhibit hall, but again, these countries are going to need financing help in order to get there and to complete these deals. And in some cases, we'll need to figure out how countries like Singapore decide to bring new capabilities and fighters into their fleet.

Chen Chuanren:

Yeah, you're right, Steve, thank you for remembering the 80th anniversary of the fall of Singapore. I think that is very important in the mentality of how the Ministry Of Defense works. The Ministry Of Defense has always been developing capabilities with a long-term view in mind. And the Chief of Air Force recently confirmed that the latest upgraded F-16s has entered service since June 2021. The four F-35Bs are a very interesting concept because they will be first testing its capabilities in integration with the Singapore F-16s in the United States, as well as the integration with the rest of the Singapore armed forces. So I think from there, they'll decide whether they'll buy more. And of course, we all know that Singapore usually does not buy fighters in single digits. So, that will be very interesting. Also in the roadmap is of course helicopters upgrades. As I mentioned, the H225Ms and the capability for the Navy to strike further, therefore the Blue Spear will give the Navy about 290 kilometers, ten of range surface to surface strike capabilities.

Thierry Dubois:

Thank you, Chuanren. Now, turning to Guy Norris, another of our commercial guru editors. So what did you find not worthy here in commercial aviation?

Guy Norris:

Well, Thierry, it's been an interesting show strangely enough. I think so far from the commercial perspective, not in the ways you traditionally expect like big orders or anything like that. We didn't fool ourselves to think that would happen, but Boeing debuted the 777X here. In Asia, its first appearance here after a nonstop flight from Seattle, we saw it in Dubai, but to see it do its display over the blue waters of the Johor Straits is just magnificent. To be honest, it was a great flying display. Airbus was right there behind with the A350-1000. So you can't from an air show, and Steve and I were talking about this earlier, you can't fail to sort of be impressed by the background beauty of this site. That's for sure.

            I think the other thing is the technology keeps coming forward, and this is the show where they like to project that. So ranging from Airbus displaying a more detailed, matured concept for a blended wing body, it was this show two years ago that they rolled that out. It's now one of the three concepts that they're looking at for a hydrogen field, sustainable airliner for the mid-thirties is playing that bit down, but it's really interesting to see the concept. And the other thing on the other end of the scale is Volocopter, here from Germany, one of the startup eVTOL makers, one of the pioneers announcing pretty significant deals here with the Singaporean government to look at developing areas of the island here into a hub for future eVTOL MRO activity and production. And they've also announced a roadmap to develop up to six vertiports on the island and connect routes to Indonesia and Malaysia from here. So it's all still happening. There may not be that many people here, but some of the key players are here.

Thierry Dubois:

What about freighters? Chuanren alluded to activity in freighters.

Guy Norris:

Yes, that's another good point. Thanks for reminding me. One of the significant things, we're just here at the show a few days almost, after Boeing launched the 777-8 freighter version. They're riding that wave right now. Airbus is too of course, Singapore was the launch customer for the A350 freighter, but Boeing is doubling down on its efforts. Now having launched the 777X version, they're now beginning to put their sights on what's going to happen next in the other parts of the market. And the big question is, "What's going to happen over the 767 replacement?" Here at the show, Boeing acknowledged that they were going to talk to Ikea about a possible exemption from the limits that would effectively end production of that as a civil aircraft from 2027 onwards, the option is to develop a 787 freighter, which is more complicated and expensive. And right now Boeing doesn't have the money to even think about that. So you can see where that's all going, but yeah very buoyant in the freighter market as we'd expect.

Thierry Dubois:

And here I am turning to Jens, your counterpart on the other side of the Atlantic. Jens, you met one of Airbus' top execs. What's his take on the local market?

Jens Flottau:

Well, I mean to take a step back, we are in the part of the world that has opened up the least so far. America, it's more or less back to normal in domestic flying. Europe is somewhere in the middle, but Asia is still the problem. So the big question is when will it open up? Everyone agrees, that at one point it will. But the question is, "When?" And in particular, the question is, "When will China open up?" I was talking to Christian Scherer yesterday. I was at the CEO forum here and some of the execs made some predictions. For instance, Robert Martin, the CEO of BOC Aviation, said, "China will open up by the end of the year." Domhnal Slattery, the CEO of Avolon said, "It's going to be inevitable that China will open up because Vietnam has opened up slowly, Thailand, Singapore."

            So there is this expectation out there that things will get moving here fairly soon, at least. And of course, that will be huge for the industry. Now, if that happens, are all problems over? By no means. Robert Martin made the point that while the immediate crisis has been handled, has been survived by most, new challenges are coming. Most importantly, huge funding requirements to just finance the growth, suppliers have to ramp back up production, OEMs have to do the same. Airlines have to buy aircraft, have to rehire people. There's this massive financing need coming up. And Robert said, "If the industry doesn't handle this properly, we'll be in the same place two or three years from now that we're in today. So it's not over yet."

Thierry Dubois:

May I ask Chuanren to jump in, there are quite a number of suppliers in the region, including here in Singapore. Have you heard about them cutting jobs and rehiring?

Chen Chuanren:

Yes. I think one of the more high-profile ones is Rolls-Royce. They were kind enough to let Aviation Week to have a look at their facility, weeks before Singapore. And gave us a brief as to know how they are maintaining the volume of their engine blade production, inside of what's going to happen in long term. And they said they're going to help hire at least 150 technicians and workers plus another 130 or so trainees to fill the demand in terms of both blade production and MRO requirements for their engines.

Thierry Dubois:

Thank you. Jens?

Jens Flottau:

Yeah. Just getting back to challenges beyond financing, three more: fuel costs, a huge issue becoming a bigger issue every day; interest rates are about to go up with no one. I mean, look back five years ago when we were in the boom times, interest rates were low, fuel prices were low which led to that growth that we saw, now it's kind of the opposite; labor cost is another one, wages are expected to go up. Inflation is going to be a huge challenge triggered and they are triggering a rise in costs for all sorts of things that airlines or OEMs or suppliers are buying. So it's going to be an interesting three years coming up.

Chen Chuanren:

Yes, I like how you mentioned wages going up because as we know ST Engineering, they are so busy with the passenger-to-freight conversion. However, they're so worried about wages, inflation simply because technicians from other countries can't move to Singapore or their facilities to work on an aircraft. And it is a major concern for them in the future.

Thierry Dubois:

Thank you very much. I think that was a nice roundup of a show that is indeed slow by the numbers, but definitely worth attending. If you think of the quality people you can meet here and of the dynamics, you have to watch. Join us again next week on our Check 6 Podcast.