Located at Taneja Aerospace airstrip in Hosur, Air Works’ US$25 million facility is equipped to carry out C checks for various types of aircraft. According to Fredrik Groth, Air Works’ CEO, carrying out C checks will be 20 per cent cheaper than in other countries. He also pointed out that he was “extremely happy on being recognised for our efforts by the DGCA, and are now all set to commence operations as India’s first commercial maintenance, repair and overhaul facilityâ€Â.
With its first mover advantage its MRO agreement with Taneja Aerospace is already the largest in India, with over 60 per cent market share. Starting with the maintenance and overhaul work on a few DC-3s in the early 1950s, Air Works currently does DGCA-approved maintenance of more than 75 aircraft including Gulfstream, Bombardier, Dassault, Hawker, Cessna, Beechcraft and others.
Air Works recently announced an authorized service centre agreement with Honeywell, under which it would offer maintenance, repair and service facilities for Honeywell engines TFE 731 and CFE 738 series, along
Many new entrants
Aviation pundits maintain that there is not enough business in India to warrant the setting up of more than three or four MROs. Among those who have finalised tie-ups with domestic companies for MROs other than Air Works are EADS’ (European Aeronautic Defence & Space Co NV) joint venture agreement with National Aerospace Company of India Ltd (NACIL), which operates Air India; an Air India-Boeing MRO joint venture, most probably with the participation of a third party and Indian Airlines-Airbus-Jupiter Aerospace MRO joint venture.
Boeing is in the process for setting up a US$100-million MRO facility at Nagpur. A part of the massive Multimodal International Passenger and Cargo Hub project, the MRO – a joint venture between Boeing and Air India – will be the aircraft manufacturer’s second such facility after Shanghai, China. Slated to become functional by the end-2010, the MRO will have the capacity to service 250 aircraft a year. Boeing incidentally has signed a lease agreement with the Maharashtra Airport Development Company (MADC), a government agency, which has provided the land for the facility. The 99-year lease agreement is for 50 acres of land and is located next to the Dr Babasaheb Ambedkar International (Nagpur) Airport.
GMR, the developers of Hyderabad and Delhi International Airports, also has an agreement with Malaysian Airlines to set up an MRO at Hyderabad.
And in the last few days, the country saw a new entrant in the MRO sector. The Bird Group signed an agreement with Pacific Propeller International (PPI), a global repair and overhaul services provider to regional airlines and military aircraft companies.
Big MRO potential
Whatever aviation pundits might say, the MRO sector, according to a study on India’s aerospace industry recently carried out by the Confederation of Indian Industry (CII) and PricewaterhouseCoopers, is expected to keep pace with the growth of aviation in the country.
The study, entitled Changing Dynamics, points out that the MRO sector would reach US$1.17 billion by 2010 and US$2.6 billion by 2020 – a growth of 10 per cent per annum. Additionally, the globalisation of MRO services, manpower cost competitiveness, the availability of talent, locational advantages and the presence of specialist capabilities combine to make India a potential global/regional MRO hub.
Manpower costs – at around Rs 1500 to Rs 2000 or US$30 to $35 per hour – amount to nearly 60 per cent less than that charged in the US or Europe. The availability of technicallyqualified personnel also puts India in an advantageous position. Perhaps, the most important is the fact that India has the geographic advantage of being somewhere in the middle between Europe and the Asia Pacific region. Today, there are no MROs active in the five-hour flying radius from India and even the country’s domestic carriers have to fly to Dubai or Singapore for maintenance and overhaul.
However, the major hindrance to India becoming a major MRO hub according to the report, is the country’s tax regime – customs duties and service tax – that deter MRO majors from setting up shop.