Surging US Airline Capacity Bodes Well For STE’s Aerospace Earnings

US airlines’ seat capacity as at end June was just 10% below that of pre-pandemic levels and this heralds a significant recovery in STE’s aircraft maintenance business. Prior to adding flights, airlines are required to perform return to service checks, particularly for aircraft that had been stored. The improvement in revenue and earnings could be seen in the upcoming interim results. We raise our target price by 4.7% to S$4.26. Maintain BUY.