Home' Asian Aviation : AAV June 2011 Contents AsianAviation | JUNE 2011 31
are leaving for
with airlines and
in the Middle East,
and offer tax-free
keen to set up
joint ventures in
India to tap lower
local labour costs,
but unless the
current high taxes are abolished, India's dreams of
becoming a global MRO hub will remain just that.
e Aeronautical Society of India (ASI) has
estimated that local manpower in the country's
MRO sector is about 50 percent cheaper than for
companies in West Asia. e society said India
needs to ensure su cient numbers of engineers
are produced to support the local MRO industry
in the long term, and that those engineers are paid
su ciently well to keep them at home.
According to ASI, India still has tremendous
potential as an MRO hub due, in part, to the slew
of LCCs that have emerged in the country over
the past decade.
It is estimated that only 7.5-11 percent of MRO
work for Indian carriers is done in-country.
A lobby group called Action MRO Committee
was set up to promote the sector by several
Indian carriers including Air India, Jet Airways,
King sher and IndiGo Airlines. e committee
met in January and made their rst presentations
addressing the problem of high taxes to the
Ministry of Civil Aviation in Delhi.
e King sher o cial said, given the right tax
environment, Indian MRO ser vice providers could
tap growing aircra maintenance demand in Sri
Lanka, Bangladesh and other markets.
One foreign MRO company that has invested in
India is MASAE, which set up a joint venture with
GMR Hyderabad International Airport at the
Rajiv Ghandi International Airport, Hyderabad.
Known as MAS-GMR Aerospace Engineering,
the 50-50 venture will start operations in July,
with major customers like Jet Air ways, King sher
Airlines and SpiceJet already secured.
The venture has a world-class hangar, able
accommodate one widebody and two narrowbody
aircraft, supported by component workshops.
MAS-GMR's initial capabilities will cover Airbus
A330 and A320, as well as Boeing Next-Generation
737 aircra families, with certi cation from the
Indian Directorate General of Civil Aviation
(DGCA) and EASA.
Separately, ag-carrier Air India plans to set up
MRO joint ventures with Boeing in Nagpur, and
Airbus parent EADS in Bangalore and Delhi.
e rapid growth of the Chinese economy, which
has been instrumental in the development of the
country's air transport industry will continue to
drive the expansion of its MRO market.
According to the Civil Aviation Administration
of China (CAAC) the local MRO market grew
from US$1.19 billion in 2002 to US$1.97 billion
in 2010. Engine MRO accounted for about 39
percent of revenue in the sector, with airframe
heavy maintenance accounting for 16 percent,
modi cations 7 percent, component repair 19
percent, and line maintenance another 19 percent.
MRO demand in China slowed during the
height of the economic crisis due to a cut in airlines'
long-haul international capacity that resulted in
some aircra being parked. However, the market
recovered earlier than expected, thanks to solid
growth in the domestic aviation sector.
With Chinese airlines expected to operate bigger
eets from this year as air travel demand continues
to increase signi cantly, annual growth in the local
MRO industry could be higher than the projected
10 percent, the CAAC said. Aviation consultancy
TeamSAI predicts that the industry's worldwide
annual average growth rate from 2011-2015 will
be about 3.4 percent, rising to 5.4 percent annually
Chinese airlines now operate a eet of 1,653
aircra . By the end of this year, the eet will have
expanded to 1,727. Some 67 older aircra will be
In its November 2010 market analysis, the
CAAC said Chinese airlines would require some
5,000 new aircra by 2015. e aviation authority
expects more Chinese airlines to contract their
maintenance out to domestically-based suppliers,
as the country's MRO ser vice providers expand
their capabilities and capacity.
The 2008 global downturn prompted many
Chinese airlines to do their maintenance at home,
as part of cost-cutting measures. With the projected
growth of China's MRO market and the expansion
"Airports are very tight on space and, more often than not,
MRO firms are put off from wanting to build a facility due to
space constraints." -- Kingfisher Airlines official
MASAE Managing Director
Mohd Roslan Ismail says
fuel prices have slowed
the MRO sector's recovery.
MAS AEROSPACE ENGINEERING
MRO providers benefit from offering a diversity of
services, such as passenger-to-freighter conversion.
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