SINGAPORE—SIA Engineering Company (SIAEC) has signed a new comprehensive services agreement with its parent company Singapore Airlines (SIA) worth S$1.3 billion ($1 billion).

The new agreement starts from the new financial year April 1 for a period of two years with the option to extend one more. This will override an existing agreement signed in April 2023.

The flag carrier is expected to take in 22 new aircraft in its 2025-26 fiscal year and retire nine aircraft. This includes the full retirement of its four remaining Boeing 737-800s.

SIAEC has received a steady stream of heavy checks, although older aircraft are spending longer periods of time at the hangar due to supply chain constraints. 

SIA says it has been taking proactive steps to mitigate the impact from supply chain disruption by minimizing turnaround times. To do this it has leveraged onshore repair capabilities such as SIAEC's joint ventures with other engine manufacturers.

This is on top of other measures including building “buffer stock” of critical spares and leveraging power-by-the-hour relationships with major engine OEMs to gain priority access to spares.