Indian MROs look for foreign partners as plane orders rise

Executives of Air Works and GMR Aero Technic are open to partnerships to build trust with Indian and foreign airlines for MRO requirements.
Executives of Air Works and GMR Aero Technic are open to partnerships to build trust with Indian and foreign airlines for MRO requirements.

Summary

  • They want to develop capabilities to offer comprehensive maintenance solutions to airlines

New Delhi: Indian companies are actively seeking partnerships with foreign players to establish a hub for maintenance, repair, and overhaul (MRO) services for airlines. Their goal is to rival Singapore’s capabilities, and create an ecosystem that will offer comprehensive maintenance solutions to airlines from engines to the smallest parts.

Top executives of India’s leading MRO, Air Works, and the up-and-coming GMR Aero Technic said they were open to partnerships and see them as a key avenue to build trust with Indian and foreign airlines for their MRO requirements.

“Regarding aircraft components, everyone understands that it is lacking in Indian MRO set-up, but can Indian MROs do it on their own? Perhaps not. Here we need support, to start with, from airlines where they can push their service providers into forming a joint venture with us," Anand Bhaskar, managing director and chief executive officer, Air Works India, said at Aero MRO India 2023 event in New Delhi.

“We are even ready for 90:10 joint ventures, with 90% in favour of the service provider, or OEM (original equipment manufacturer), and 10% just to be an Indian partner. We are willing to go the extra mile to get the capabilities into the country. It is a question of hand-holding and trying to push the service provider in our favour."

With over 750 aircraft currently in operation, and around 1,500 more in the pipeline, industry insiders emphasize the need for a local network capable of delivering maintenance solutions to Indian airlines. This will cut down on dollar-denominated expenses for carriers and ensure a swifter turnaround in the repair of aircraft parts, they added.

Global supply chain challenges have disrupted flight operations for airlines worldwide over the past two years.

IndiGo, for instance, has over 40 aircraft grounded since last year due to a shortage of spare parts. A maintenance, repair, and overhaul unit in India could help airlines such as IndiGo to plan for disruptions.

“We are trying to reach OEMs, component manufacturers to either partner with us, or to set up shop, and we will help them in whatever way we can," Dinesh Bohra, chief executive officer of GMR Aero Technic, said.

“The time has come...we know that we have ‘x’ number of aircraft flying and in three years it will be 3x. This gives a good reason for all OEMs, distributors to have warehousing in India. At GMR, we are ready to partner, we are ready to support if somebody wants to come and we can create warehouses not just for India, but also for Asia-Pacific and the Middle East," Bohra added.

Bhaskar said a greater number of joint ventures in the MRO sector would contribute to building a compelling business case for a successful MRO hub in the country. He highlighted that established MRO hubs such as Singapore boast over 80 joint ventures in this segment.

According to a Niti Aayog report, the MRO industry in India is currently in its early stages, with a size of $1.7 billion as of 2021. It is anticipated to grow to $4 billion by 2031 registering a compound annual growth rate of 8.9%, surpassing the global average of 5.6%.

Besides the need for partnerships with foreign players, Indian MRO executives also underscored the importance of incentives, such as those offered under the Centre’s production-linked incentive scheme. They also advocated for a level playing field in terms of taxes and duties to align the country’s MRO ecosystem with that of Turkey and Malaysia. Besides, collaboration with Indian airlines is crucial for realizing the full potential of the sector, they added.

“As an operator, things should be planned well, MRO facilities should be equipped to face all challenges, whether a machine is three years old or 18 years old. Now, we are going into a phase where you are flying older aircraft and, hence, we need a lot of maintenance. Unless an MRO is experienced, good, or has tie-ups with those partners, you are not going to get the aircraft in time. You send an aircraft for 40 days, it ends up taking 60 days (for MRO) and your planning goes for a toss. We need to have an MRO with complete solutions," Arun Kashyap, chief operating officer, SpiceJet, said.

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