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AAI proposes to offer land at 8 airports for MRO

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Photo: Mint

  • This is part of the government's vision to make the country a hub for MRO and related work
  • In addition to the eight AAI-operated airports, airports at Bengaluru and Cochin, which are operated by private players, have also earmarked land for development of MRO, civil aviation minister said

New Delhi: The Airports Authority of India (AAI) has identified land at eight airports, which include ones at Begumpet, Bhopal, Chandigarh, Chennai, Juhu, Kolkata, New Delhi and Tirupati, for inviting bids to set up Maintenance, Repair and Overhaul (MRO) units to service aircraft, civil aviation minister Hardeep Singh Puri informed the Rajya Sabha on Wednesday.

This is part of the government's vision to make the country a hub for MRO and related work.

"The Airports Authority of India (AAI) has come up with a liberal Maintenance, Repair and Overhaul (MRO) policy with significantly reduced liberalised land rentals," Puri said adding that no revenue share will be charged from MROs by AAI under the new contracts.

In addition to the eight AAI-operated airports, airports at Bengaluru and Cochin, which are operated by private players, have also earmarked land for development of MRO, Puri added.

The government has taken several measures to attract companies to set up MROs in India, which include reducing Goods and Services Tax (GST) on MROs from 18% to 5% with full Input Tax Credit from 1 April 2020, treating transactions sub-contracted by foreign OEMs (Original Equipment Manufacturers) and MRO companies to domestic MRO as exports with zero-rated GST from 1 April 2020, waving off custom duty on tools, toolkits and spares imported by MROs, and permitting 100% Foreign Direct Investment (FDI) through automatic route, among others.

Puri added that MROs currently operate out of 19 airports run by AAI, which include airports at Hyderabad and Mumbai, which are run under the PPP (public-private partnership) model.

At present, most airlines fly abroad to service their aircraft.

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