Expanding air fleets to boost maintenance business

Expanding air fleets to boost maintenance business
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First Published: Fri, Feb 09 2007. 12 25 AM IST
Updated: Fri, Feb 09 2007. 12 25 AM IST
Bangalore : As airlines’ fleet swell, they are creating an entire industry in their wake: an industry devoted to the maintenance of these brand new aeroplanes.
The so-called MRO business — for maintenance, repair and overhaul— is currently non-existent in India, but the Confederation of Indian Industries estimates that it could be worth $2 billion (Rs8,800 crore) in the next four years. 
India’s airlines currently own or have leased 257 commercial aircraft, and have ordered at least 350 more. While basic maintenance is carried out by engineers, major repairs and overhauls to the planes is generally done abroad.
“There is no MRO facility within a five-hour flight from India,” said V. Trivedi, chairman of Indian, adding, “That adds significantly to airline costs.”
“There is a huge need for MROs in India,” he said. “We expect our engine MROs to be profitable, and I can see how others can take advantage of the opportunity.”
And chasing a piece of the MRO market here at AeroIndia, are both established players such as Boeing and Airbus— which have both announced plans to build an MRO facility eachand new entrants, such as Taneja Aerospace and Aviation Ltd.
The Bangalore-based Taneja has announced a partnership with Belgium’s Sabena Technic, a leading European aircraft maintenance company, to build an MRO in Tamil Nadu within the next six months.
While not too many details of Taneja’s 50-50 tie-up with Sabena are available, it could mean that carriers such as Air Deccan and Kingfisher Airlines could get their turboprop aircraft maintained within the country for the first time.
Taneja plans to start small but hopes to eventually service jets, including the Airbus A320, which makes up most of the low-cost carriers’ fleets, and Boeing 737s, a plane that is popular with Jet Airways and Indian. Initially, Taneja will be able to handle a maximum of three planes at the same time.
“For an industry like MROs to thrive, fleets need to reach a critical mass,” said Kapil Kaul, Indian subcontinent CEO of the Centre for Asia Pacific Aviation.
Even though its plans are yet to crystallize, Airbus, in a tie-up with Hindustan Aeronautics, has pledged about $100 million (Rs440 crore) for an MRO facility either in Hyderabad or Bangalore. Airbus executive vice-president Kiran Rao, said he expects construction to begin in the next six months.
Not to be left behind, Boeing, in a tie-up with Air India, will build a $100 million MRO in Nagpur.
Texas-based Bell Helicopter said that if it were to win an Indian Army contract for 197 Bell 407 choppers, it would also build an MRO for anywhere between $60million (Rs264 crore) and $100 million. Pawan Hans Air Deccan,
Meanwhile, Boeing signed a memorandum of understanding with engineering and construction giant Larsen & Toubro, for business opportunities in India’s defence sector.
PTI also contributed to this story.
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First Published: Fri, Feb 09 2007. 12 25 AM IST
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