Air India has pushed the start of its maintenance, repair and overhaul (MRO) facility at Kempegowda International Airport in Bengaluru by at least a year to January–March 2027, as construction remains unfinished, according to three people familiar with the matter.
The airline’s inability to source construction materials including steel and bolts from domestic manufacturers is the key reason for the delay.
Planned on a 35-acre site, the facility, designed with 12 hangar bays to service both narrow-body and wide-body aircraft, is still under construction, one of the persons quoted said, requesting anonymity due to the sensitivity of the issue.
In its first phase it will have 3 widebody and 2 narrowbody hangar bays. Hangars are spaces where aircrafts are parked, maintained, and repaired. As of April, Air India has 126 narrow-body and 60 wide-body jets.
“There are construction delays pertaining to steel and some of the bolts required, and the airline is working with engineers and partners to expedite this as quickly as possible,” the second person quoted above said, confirming that the original timeline of early 2026 has been pushed back.
The delay is largely due to the complexity of the hangar structure. “The hangar is a very large structure with an unsupported roof, which requires particularly high-grade steel and bolts in large quantities. There is no single provider that has been able to supply the required volume at the expected quality and speed,” the person said.
Suppliers had initially committed to delivering the materials but later struggled to meet the required specifications and scale. While sourcing is being done domestically, production timelines have been longer than anticipated.
The commissioning has now been pushed to the first quarter of FY27 from the target of early 2026, the third person quoted above said.
FX losses, longer downtime
A detailed email sent to Air India on Monday seeking comments on the construction delay and new timeline for commissioning went unanswered.
A delay in commissioning the MRO facility would mean the airline continues with its existing approach, handling maintenance work domestically where possible and sending the remaining aircraft overseas.
"By localizing these services, these airlines aim to reduce FX (foreign exchange) outflows, minimize aircraft downtime, and capitalize on government incentives such as the reduced 5% GST on domestic MRO services," wrote Karan Khanna and Shamit Ashar, aviation analysts at Ambit Capital in a note on 27 April.
An MRO facility in India would also have helped the Tata owned airline reduce rising costs, which has become a challenge for Air India led by CEO Campbell Wilson who resigned in March. For now Wilson will continue till the Air India board finds a new successor.
In FY25, privately held Air India, reported revenue of ₹78,636 crore and a loss of ₹10,859 crore. It is yet to announce its FY26 results.
The delay comes amid expectations that losses will more than double in FY26, as well as setbacks to CEO Campbell Wilson’s aircraft retrofit programme. The modernisation effort, part of a $400 million fleet upgrade under the Tata Group’s five-year revival plan announced in 2022, is now expected to be completed only by 2029, nearly two years behind schedule, Mint reported earlier. Even so, the airline has begun seeing early progress. It received its first retrofitted Boeing 787-8 aircraft in April, marking the start of visible upgrades, and expects to induct another seven to eight such aircraft by the end of 2026.
In 2024, Air India had signed a memorandum of understanding (MoU) with the Karnataka government to establish MRO facilities in Bengaluru, according to a company statement.
Competition ahead
“The Bengaluru MRO facility is coming up at an opportune time to help strengthen India’s aviation ecosystem, while enhancing our in-house capabilities to maintain our fleet. This is a step ahead in our mission to make Air India a world-class airline,” Air India CEO Campbell Wilson said in an earlier 2024 statement.
IndiGo is also developing a 31-acre MRO facility at Bengaluru's Kempegowda International Airport, set to open in early 2028. The 12-bay hangar will be handling both narrow- and wide-body aircraft. Most recently, Akasa Air also partnered with the upcoming Noida International Airport to establish its first dedicated MRO facility.
- Air India's Bengaluru MRO facility has been delayed by over a year to early 2027.
- High-grade steel and bolt shortages from domestic suppliers caused the delay.
- Overseas MRO dependence continues, draining foreign exchange and extending aircraft downtime.
- Delay compounds CEO resignation, retrofit slippage, and doubling losses at Air India.
- IndiGo and Akasa are also building MRO hubs, intensifying competitive pressure.