Mr Dennis Tan Lip Fong (Hougang): Mr Chairman, Singapore’s Aviation industry has been one of the hardest hit industry in this pandemic, given the sector’s complete dependence on international travel. With the resurgence of COVID-19 in many regions of the world, as well as the emergence of new and more contagious COVID-19 strains, the outlook for the aviation sector remains bleak with air travel likely to be stymied well into this year and next.
I recognise the efforts made to support this industry in terms of re-establishing air travel and supporting airport-related companies and employees through the various support packages previously announced, and the newly announced plans in Budget 2021. However, I wish to clarify with Minister on a few matters.
The aviation sector has seen the biggest influx of targeted support of $870 million in this Budget. However, is the Ministry also looking to extend targeted support to other aviation related businesses that are similarly affected by the effective halt of air travel? Specifically, the aerospace sector needs help. It currently employs some 22,000 people of which 80% Singapore residents and contributed some $13 billion in total output to our national economy in 2019. Companies in this sector include those involving maintenance, repair and overhaul (MRO), avionics and aircraft component production and repair.
These businesses are essential segments of our aviation supply chain in Singapore, and face major and sustained downstream impact resulting from airlines deferring aircraft orders and reducing their after-market expenses. Already, we have seen significant retrenchment exercises among a number of key players in the sector. For example, the aircraft engine manufacturer Rolls-Royce retrench about 24% of its workforce in Singapore in July last year. NTUC itself had to intervene in the retrenchment exercise conducted by Eagle Services Asia to protect Singaporean jobs.
With no signs of an immediate recovery for aviation, more of such retrenchments may be expected as companies seek to cut down on their expenses. Even when the air travel does begin to normalise, given that the aviation supply chain is driven by airline demand, aerospace companies could likely be some of the slowest to recover in this hard-hit sector. While they still do have continuing GSS support the sector could use more targeted support if we are to maintain our position as an aviation and aerospace hub. Could the Ministry considered tailored support schemes that could be explored specifically for this group?
Would the Ministry also be able to provide further details of its previously announced plans to develop programmes for aviation workers; at risk of losing their jobs or being unemployed, first mentioned in December last year? What is the coverage and scale these programmes, and when will they come into effect?
This is a especially pertinent as aviation workers are likely to continue to experience a dent in their incomes, not to mention face increased job risk, well into this year and next, even as other parts of our economy slowly start to pick up.
I would also like to ask in terms of retrenchment in the sector, what percentage of the aviation and aerospace sectors has been made redundant and what percentage of this retrench group has benefited from the COVID-19 recovery grants? Can there be consideration of extending the eligible period of support beyond the current three months, given that the aviation sector is likely to remain impacted by the pandemic for a prolonged period of time. And employees in this niche industry may need more time to secure jobs outside this view, given the need for retraining and reskilling.
Lastly, I think there is a need for us to evaluate the upcoming pipeline of talent from our Institutes of Higher Learning into both the aviation and aerospace industries. Fresh graduates from these programmes may find little opportunities there if the global recovery is gradual. I hope the Minister can assuage these concerns.
Ministry of Transport
5 March 2021