Aviation is a growth industry in India

Heavy maintenance MRO facility Delhi.

During 2008, Air India announced its intention to set up a heavy maintenance facility in Delhi. In a joint venture with European Aeronautic Defence and Space Company (EADS) they are to set up an aircraft maintenance, repair and overhaul (MRO) centre in Delhi for the state-owned carrier’s Airbus aircraft.The centre, which will start operations from early 2009 at the India Gandhi International Airport, will become a member of the Airbus MRO network.

The government’s National Aviation Company of India Ltd (Nacil) owns Air India, while Airbus is an arm of EADS.

The two firms will initially be 50-50 equity partners in the joint venture, but possibly, a third Airbus network partner, a local EADS affiliate company, will join later. The total project cost has been estimated at $40 million spread over five years. As per the agreement, the joint venture will initially undertake airframe maintenance and repair of Nacil’s Airbus aircraft. Later, the facility will service other types of aircraft like the ATR, aircraft of other airlines, and aircraft outside the Airbus family, as well as entering the component maintenance business.

Nacil is currently in the process of inducting 43 new A320 aircraft from Airbus into its fleet. The induction programme, which started last year, will continue till early 2010. Currently, it operates 74 Airbus aircraft.

EADS officials said the MRO facility would also cater to the markets in South Asia region and neighbouring countries. By 2013, over 100 single-aisle aircraft and around 10 wide body aircraft would be maintained and the centre would employ 250 to 300 Indian technical personnel.

Aircraft MRO Nagpur

Air India said the airline was setting up four MROs in the next couple of years. Another MRO in joint venture with Boeing this time, will come up at Nagpur.

Air India, which placed orders for 111 aircraft in 2005, will also set up MROs for engines and components. The aircraft will be inducted in a phased manner by 2012.

In the meantime, India’s first aircraft overhauling facility is already taking off at Hosur.

Mumbai-based aviation service provider Air Works has begun commercial operations of its MRO (maintenance, repair and overhauling) facility at Hosur near Bangalore, eventually employing over 300 aircraft engineers. No other MRO facility has come up yet in India so far. An opportunity exists to hire good aircraft engineers now, while there is so much chaos in the aviation sector elsewhere, owing to global economic slowdown.

Up to now, Indian carriers got their aircraft serviced at MRO facilities in the US, Europe and West Asia. India is expected to have over 500 aircraft by 2010.

Hosur will provide services such as line and base maintenance, aircraft painting, component and structural repairs as well as cabin and avionics upgrades.

Air Works is also in the process of bidding for setting up an original equipment manufacturer (OEM) facility at the Delhi and Mumbai airports, and has tied up with Zurich-based Jet Aviation, an MRO service provider for business jets and other small aircraft.

At present, Air Works plans to invest upward of $50 million for setting up the infrastructure to support the commercial MRO initiative.

Initially, Air Works will provide services for ATR 42/72 mid-sized aircraft; currently, India has 80 such aircraft. In the first year, the company handled 12 aircraft, mostly ATR types, and expects to earn $50 million in the next two years.

Aircraft maker Boeing signed a land lease agreement with Maharashtra Airport Development Co. (MADC) for setting up a $100-million maintenance, repair and overhaul (MRO) facility. The state-run MADC will provide land for the project.

Boeing chose Nagpur for setting up the facility as there is ample availability of manpower and land. The city also provides favourable climatic conditions for the facility.

All this makes India an exception. While Boeing announced that it would slash 10,000 jobs worldwide, demand in India, makes that location the exception to the rule.

Boeing still though has orders worth $275 billion for supplying 3,700 aircraft to various airlines across the world, taking at least five years for the company to meet the demand.

The reason for all this interest in India....

Boeing is eyeing up $20 bn in defence orders from India. Bullish about India’s growing aviation market, Boeing sees a $20 billion opportunity in the defence sector alone over the next decade.The company is also eyeing $105 billion worth of orders for over 1,000 commercial airplanes from various Indian carriers over the next 20 years.

Indian has defence orders pending worth $15-$20 billion for F/A-18 Super Hornet combat jets, P8I maritime surveillance aircraft and Apache combat helicopters.

Air India has purchased airplanes worth $25 billion during last three years.

Boeing already has collaborations with Hindustan Aeronautics Limited, Bharat Electronics Limited, the Tatas and other companies for manufacturing aerospace components. Boeing recently entered into a $500 million joint venture with the Tatas to manufacture aerospace components on the back of a $1 billion tie-up with Hindustan Aeronautics Limited in the same sphere.