ST Aero's Panama shop eyes first US airline customer

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ST Aerospace Panama is pursuing a gradual expansion in line with the three-year old maintenance company's goal of eventually operating 12 narrowbody lines with 1,000 employees.

The Singapore Technologies Aerospace (ST Aero) subsidiary opened in May 2007 and currently maintains a mix of Airbus A320s, Boeing 737s, Boeing MD-80s and Embraer E-190s. ST Aero recently retired president Tay Kok Khiang says Latin American customers currently account for most of ST Aerospace Panama's business, with Panama's Copa Airlines accounting for about 50%. But he adds that ST Aerospace Panama is already doing some work for US leasing companies and as the company expands it expects to start maintaining aircraft for US carriers.

"I think there's very good interest [from US carriers] but it's a matter of timing and it's a question of how fast we can build up in terms of manpower," says Tay, who visited ST Aerospace Panama just prior to his 1 May retirement from ST Aero.

Tay says ST Aerospace Panama now has 300 employees and will add about 100 employees this year, but the ramp-up process is slow. "Panama doesn't have too many aviation people," he explains. "When we went in we knew that we had to train people. So we have a programme to train people from high schools and universities and that's what we are doing.

"We have about 300 people now and we plan to raise it to 1,000 over time. It will take a couple of years," says Tay, who served as president of ST Aero for nine years, and was responsible for the 2006 decision to establish a new maintenance operation at the former Howard US air force base in Panama.

ST Aerospace Panama, originally known as Panama Aerospace Engineering (PAE), opened with four former military hangars each with the capacity of handling three narrowbody aircraft simultaneously. Tay says currently there are nine lines operating with capacity to add another three but "in terms of manpower we are only using four or five lines".

ST Aero for now accommodates its US airline airframe maintenance customers at its facilities in Mobile, Alabama and San Antonio, Texas. Tay says US customers account for 80% to 90% of the work at ST Aero's San Antonio and Mobile subsidiaries. "Over time [ST Aerospace Panama] will complement the US because in the US we're full," Tay explains.

He points out Panama is well positioned geographically for the US market as it is only a two to three hour flight from most US airline hubs. "Narrowbodies will fly down definitely. You have a big price advantage. For that reason Panama Aerospace's existence is for the North American market," he says.

While ST Aerospace Panama has so far only been adding employees at a rate of 100 per year, Tay says this rate will accelerate as the company becomes larger. He acknowledges there are still some unsold maintenance slots at ST Aerospace Panama for the remainder of 2010 but says there is enough demand in the market "for our level of manpower".

Tay adds that "obviously if the market is better we have to ramp up faster". But he warns: "We don't want to train too much too fast. You have to make sure the supervision, quality and all of that is taken care of."