Mumbai: The ministry of civil aviation is considering a plan to combine two aircraft maintenance facilities planned separately by Air India Ltd and Indian Airlines Ltd, the state-run carriers that are being merged into a single entity. Investments in the project may be led by Bangalore-based entrepreneur Rajeev Chandrasekhar and a yet-to-be-identified operations partner.
The maintenance, repair and overhaul or MRO project is expected to cost Rs700 crore.
Air India had earlier plan-ned an MRO unit in Nagpur with US aircraft maker Boeing & Co. at an investment of $100 million (under Rs400 crore), while Indian Airlines had agreed to set up such a facility either in Hyderabad or New Delhi with Jupiter Aviation & Logistics Ltd, a company controlled by Chandrasekhar.
The businessman, a former Intel design engineer who is now a member of Parliament, made his millions in mobile phone services after he sold his company BPL Cellular Holdings Ltd to Hutchison Essar Ltd (now Vodafone Essar Ltd), India’s fourth largest wireless service provider.
A significant minority stake in the MRO venture will be with National Aviation Company of India Ltd, or Nacil, the company into which the carriers are being merged. Boeing and Airbus SAS will remain minority investors until an operations partner is identified.
Details could not be immediately ascertained. “Management consultant Accenture, which is advising on the merger process, is expected to submit its recommendations and modality on the proposed combined MRO by mid-October,” said a senior Air India executive on the condition of anonymity as he is not authorized to speak to the media.
The MRO business may now be set up in two locations, New Delhi and Nagpur. The facility in the capital will maintain and repair narrow-bodied aircraft such as Airbus A320s or Boeing B737s, while the one at Nagpur would take care of bigger planes: B777s or A330s. “The logic behind this move to cash in on the synergies of location and operational efficiency. For instance, Air India’s low-fare wing would be situated in Delhi. Naturally, all Boeing B737s (smaller planes) would be maintained at Delhi apart from smaller A320s,” a person close to the situation said, seeking anonymity.
S. Ravi Narayanan, CEO and managing director of Jupiter Aviation, declined details. “We will act upon the instructions of the ministry of civil aviation,” he said. Nacil chairman and managing director V. Thulasidas said he would comment only after receiving the Accenture report.
A senior ministry official, who asked not to be named, said the government favours a maintenance facility partner who can service different planes instead of specializing in a single make.