21.4.09

Aviation MRO takes off

Finally, out of the five planned MRO (maintenance, repair and overhaul) facilities in India, one has taken off. Air Works India Engineering has set up the country’s first third party MRO facility for commercial aviation in India at Hosur, in Tamil Nadu. The facility, set up with an initial investment of $5 million (Rs 25 crore), will undertake services that include airframe maintenance and modifications, conversion of passenger aircraft to freighters, cabin modifications and avionics related activities. Air Works has DGCA approval to carry out MRO services on ATR 42/72 type aircraft. By the end of the month it is expected to get approvals for Boeing 737 series of aircraft and approvals for A-320 in the following months. Currently, private Indian carriers collectively spend $100 million (Rs 500 crore) on airframe related maintenance work. When one adds other aspects like engine and component related work, the total spend per annum is $800 million (Rs 4,000). This figure is expected to reach $1.4 billion over the next five years. Typically, airlines send their aircraft to West Asia, Europe, and South East Asia for maintenance, incurring huge fuel and navigational expenses beside the MRO fees. “Having an MRO in India will help them reduce their costs by 30%,” says Fredrik Groth, CEO of Air Works. In the first year of operations, Groth expects to service 28 aircraft, clocking revenues of around $5 million (Rs 25 crore). At present, private carriers in India have 250 aircraft between them. On each aircraft the maintenance spend ranges between $80,000 (Rs 40 lakh) to $150,000 (Rs 75 lakh). “There is a huge demand for MRO service in the country especially from low-cost carriers, as they want to minimise their maintenance expenses,” says Groth. The company has already tied up with Kingfisher Airlines for the maintenance of the latter’s ATR fleet and is in talks with other airlines. The company plans to invest $6 million (Rs 30 crore) in the coming year to put up a new hangar facility that would service two narrow bodied aircraft (A-320, B-737) under one roof.

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