Balaji Sadasivan, senior minister of state for information, communications and the arts, said Singapore's thriving aerospace industry was largely dependent on the city-state's standing as the fourth largest air hub in Asia.

"This status, however, is being threatened by other regional airports such as Kuala Lumpur, Bangkok and Dubai," he said in a speech to unionised workers, including some from the aerospace industry.

"These airports have in recent years been actively upgrading and improving themselves while aggressively cutting handling charges in a bid to pull in more air traffic, threatening to seriously undermine Singapores position as a global air hub.

"In addition, the emergence of long haul aircraft, like Airbus A380 (super-jumbo), means that aircraft are now able to fly longer distances without stopping mid-journey and threaten to bypass Changi Airport. Airlines travel routes could be altered with fewer stops or no stops at all at transit airports."

On the positive side, Sadasivan said budget airlines were expected to boost the aerospace industry because they were likely to outsource their maintenance, repair and overhaul needs to keep costs low.

Sadasivan said it was important for workers in the industry to realise the challenges faced by Singapore.

"We must zealously guard Singapores status as a regional air hub and not let complacency set in," he told the gathering to mark Singapore's 40th independence day on August 9.

To ensure that Singapore retains its competitive edge, the aerospace industry must improve its service offers and develop cheaper solutions for customers, he said.

The aerospace industry accounts for 13,000 jobs, with about 100 aerospace companies in operation, among them global giants like Pratt and Whitney, General Electric, Honeywell and Rolls Royce. Home-grown firms include SIA Engineering and ST Aerospace.

The industry last year posted record output of S$4.5 billion (US$2.7 billion), up 16.3 percent from 2003.

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