Home' Asian Aviation : AAV June 2011 Contents AsianAviation | JUNE 2011 29
tra c grows. Airlines are now no longer are deferring
maintenance checks as their fleet utilisation
Older aircra that were parked during the global
downturn are now being returned to ser vice, while
order books are stronger as airlines begin once more
to expand their eets with new or leased aircra .
ese additional aircra will themselves also need
maintenance, the spokesman said.
Dominik Wiener-Silva, Lufthansa Technik
Philippines (LTP) vice-president for marketing
and sales, said he believes the outlook for 2011 is
promising, with Asian economies setting the pace
again. However, rising oil prices present a risk that
needs to be monitored.
"LTP expects strong demand from the region, as
we are positive on the growth of LCCs, and there are
also start-up carriers which are preparing to launch
operations in the region later this year," Wiener-Silva
Wiener-Silva added that, nevertheless, operators
may consider deferring non-critical MRO work,
such as cabin modi cation and painting as they strive
to cut expenditure.
LTP is based at Ninoy Aquino International
Airport in Manila. Its two hangars can accommodate
ve widebody aircra and two narrowbodies. e
company broke ground in April for a third hangar,
which will cost about US$30 million.
When completed in June 2012, the new hangar
will be able to accommodate one widebody and
two narrowbody aircraft. LTP's airframe heavy
maintenance capability covers Airbus's A340, A330
and A320 jetliner families and the company plans
to dedicate one hangar to work on behalf of LCCs.
Malaysia Airlines' MAS Aerospace Engineering
(MASAE) unit has yet to see any slowdown in the
MRO market, despite surging fuel costs, Managing
Director Mohd Roslan Ismail said. "Most of the
airlines are placing orders for new aircra with better
fuel e ciency. We believe there will be [demand for]
more C-check maintenance or lower, rather than
heavy maintenance," he added.
Still, according to Roslan, rising fuel prices have
slowed the industry's recovery from the 2008
downturn and it may take another four to ve years
before a full recovery, assuming there are no further
According to US-based aerospace consultancy
AeroStrateg y, the global air transport MRO market
will increase in value from US$43.6 billion in 2010
to US$58.4 billion in 2019, with India and China
growing at an average 11 percent and 10 percent,
respectively, while the Asia-Paci c region will see
4.1 percent growth. AeroStrateg y foresees growth
of about 5-10 percent this year.
India's Ministry of Civil Aviation's harbours hopes
of making the country a global MRO hub but faces
signi cant hurdles. e country's MRO market was
worth more than US$1 billion in 2010, but the
government has yet to address the problem of high
import duties on aircra parts and other taxes, which
hurt maintenance service providers and make India
less desirable as a site for their operations.
A 12.5 percent ser vice tax is levied on aircra
maintenance carried out locally, while imported
spares are subject to customs duty as high as 50
percent, plus a value-added tax of 12.5 percent.
ese fees put o would-be investors, who are keen
to set up joint ventures in India with local carriers.
e situation has also encouraged Indian carriers to
outsource heavy maintenance to MROs outside the
country -- mainly in Europe, Malaysia and Singapore.
According to Air Works India Executive Director
Ravi Menon, this not only increases costs for Indian
carriers, but means the economy misses out on
Indian carriers have long been asking the
authorities to abolish or reduce some of the taxes to
a minimum. So far, the calls have fallen on deaf ears.
An o cial at King sher Airlines said a heavy
maintenance check carried out in India with a
locally-based MRO ser vice provider would cost
about 40 percent more than outsourcing the work
"No Indian carrier would be prepared to pay this
as it would be too costly," the o cial said.
Although Indian carriers that import spares for
their own aircra are exempted from paying the
taxes, airlines are not prepared to make the heavy
investment needed to set up a maintenance operation,
which would require hangar facilities, tooling and
equipment, not to mention administration and
Established major airlines like Air India and Jet
Airways have their own MRO facilities but only
state-owned Air India has a heavy-maintenance
Lack of space for new facilities at airports and
harsh regulatory restrictions are other factors
hindering the growth of the domestic industry. e
King sher executive added that new airports are
built without proper planning to accommodate such
" ese airports are very tight on space and, more
o en than not, MRO rms are put o from wanting
to build a facility due to space constraints," the o cial
said. India is expected to increase the number of its
airports to 125 airports by 2015, from 99 this year.
Finally, India's MRO sector faces a shortage of
skilled labour. Experienced engineers and technicians
"LTP expects strong demand from the region, as we are positive
on the growth of LCCs." -- Lufthansa Technik Vice-President
The growth of low-cost
carriers has driven higher
maintenance demand for
Links Archive AAV May 2011 AAV July August 2011 Navigation Previous Page Next Page