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Airlines eye India as global maintenance hub

Saturday 16/09/2017 - Source: The Economic Times


Nagpur is transforming at mach-speed these days. It appears that the 'Orange City' is set to peel off a success story on a new front. The current buzz word in the city and at far-away, oak-panelled boardroom of aviation major Boeing is the same - MRO.

Boeing will be investing $100 mn to develop an MRO (maintenance, repair & overhaul) facility in the city. And, it's not only Nagpur. Cities such as Delhi, Hyderabad and Bangalore are all going to script a new history - straight from the skies. Boeing apart, aviation biggies such as Airbus, GE, Gulf Aircraft Maintenance (Gamco) and Indian aviation players - Kingfisher Airlines, Jet Airways, Air Deccan and Air India - are all set to cash in on this new business, which for once is not playing out in the skies but on the ground itself.

According to industry estimates, the entire Asia-Pacific aircraft and engine MRO market is pegged at $9.71 bn and is estimated to touch $12.90 bn in 2011. By 2015, India will have more than $4.5 billion of investment only in MRO facility.

The growth in traffic passing through Indian airports is estimated at 18.8% a year, raising the present traffic of 733.38 lakh to 2,054 lakh by 2011-12. Keeping in view these growth projections, substantial augmentation in airport capacities and MRO facilities is warranted during the 11th Plan period. The government is keen on developing India as a global offshore hub. "If we have to make India an international hub, then it is imperative that we have a strong MRO facility. The ministry would encourage and assist serious players for setting state-of-the-art international quality units. They will be located in various aviation hubs in the country to meet the growing demand of the industry," says Arun Mishra, joint secretary, civil aviation ministry.

The biggies in the league have already realised the potential that MRO space has to offer. Aviation major Boeing is teaming up with various stakeholders in India to determine appropriate key partners for the MRO operations.

"We have a unique breadth and depth of capabilities to help establish a safe, effective and efficient MRO industry - from software systems that help airlines identify and fix airplane faults to pilot and mechanic training to an OEM's understanding of how its airplanes should best be maintained and repaired. Plus, it benefits Boeing both directly and indirectly to participate in developing a system that is needed to accommodate many new Boeing planes and services," says Dinesh A Keskar, senior VP, sales, Boeing Commercial Airplanes.

Airbus, which currently holds 71% marketshare in India with 130 aircraft in use, will be investing around $1 bn in the country in various segments, including aero-structure design, engineering, research and technology in the next 10 years. "Airbus does not get directly involved in MRO operations. India is very strategic for Airbus and we have been asked by our customer, Indian, to facilitate them in creating an MRO venture," says an Airbus official.

The aircraft manufacturers are not the only ones. Vijay Mallya-owned Kingfisher Airlines is all set to start its MRO operations in the next three months and is looking for a global partner. Similarly, Air Deccan is planning to start a full-fledged MRO facility in Bangalore within a year.

"We are planning an investment of around Rs 100 crore and are currently evaluating all options. We haven't zeroed in on any city but it could either be Bangalore, Cochin or Chennai," reveals Hitesh Patel, executive VP, Kingfisher Airlines.


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