August 11, 2017 3:14 am JST

Singapore Airlines seeks more pilots, revenue in one fell swoop

Training venture with CAE aims to capitalize on Asia's need for 248,000 aviators

MAYUKO TANI, Nikkei staff writer

The CAE deal marks Singapore Airlines' second major training joint venture, after this Airbus Asia Training Centre. © Reuters

SINGAPORE -- Singapore Airlines is teaming up with CAE, the global leader in flight simulators, to run an aviation training center in the city-state. 

The arrangement, announced by the airline on Thursday, is aimed at meeting growing demand for commercial pilots in the region. A 50-50 joint venture, to be established by the end of the year, will take over Singapore Airlines' existing training center near Changi Airport.  

Four flight simulators for Boeing aircraft will be transferred to the joint entity, while additional CAE simulators will be added in the future, according to a news release.

CAE is expanding its foothold in Asia though joint ventures with airlines. The Canadian company's existing partners include Air Asia, Cebu Air's Cebu Pacific, and Japan Airlines.

Setting up a new training company "is also in line with our push to drive revenue-generation from new adjacent businesses," Singapore Airlines chief executive Goh Choon Phong was quoted as saying in the release.

This is the airline's second major joint venture focused on pilot training, after the Airbus Asia Training Centre, which opened in May 2016 in an aviation industrial park in Singapore. The center had 40 airline customers as of the end of March, up from 17 when it opened. The facility is equipped with six simulators and has room for two more -- to be delivered by 2019.

Asia is grappling with a severe pilot shortage. Air travel demand is booming, due to the growth of the middle class along with the proliferation of budget carriers.

Boeing estimates that 248,000 new pilots will be needed in the Asia-Pacific region by 2035, accounting for 40% of global recruitment demand.

Aside from filling cockpit seats, Singapore Airlines is looking to diversify its revenue sources -- a key pillar of its growth strategy. The company faces tough competition from budget rivals as well as powerful full-service carriers from emerging markets like China and the Middle East. 

Singapore Airlines is in the middle of firming up a restructuring plan that is expected to include both cost cuts and revenue-generating initiatives.

Asia300

Singapore Airlines Ltd.

Singapore

Market(Ticker): SES(C6L)
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Asiana Airlines, Inc.

South Korea

Market(Ticker): KRX(020560)
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Shares: 205.23M
Asia300

Cebu Air, Inc.

Philippines

Market(Ticker): PHS(CEB)
Sector:
Industry:
Transportation
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Market cap(USD): 1,191.96M
Shares: 605.95M

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