Home' Asian Aviation : AAV July August 2011 Contents MRO
await Indian MRO providers
India's maintenance, repair and overhaul industry is poised for growth, but has to overcome some key hurdles
first, writes Radhakrishna Rao.
India s civil aviation sector is one of the most
dynamic in the world, with an estimated
15 percent annual passenger tra c growth
rate triggering eet expansion among the
country s airlines, as well as the expansion
and modernisation of the its airport
By 2025, India s airlines will operate about
1,800 aircra , handling an estimated 400 million
passengers a year. According to Nasim Zaidi, India s
Civil Aviation Secretary, the Indian civil aviation
sector will need to invest around US$30 billion over
the next een years to prepare itself for increasing
passenger and cargo demand.
However, the growth of India s fledgling
maintenance, repair and overhaul (MRO) sector
has not kept pace with the civil aviation boom. Ravi
Menon, executive director of Mumbai-based MRO
provider Air Works, says: "At present less than 5
percent of the MRO work [for Indian carriers] is
carried out in India. It all goes abroad."
According to Menon, the major challenges to be
overcome in positioning India as a cost-e cient
MRO hub include high taxes, regulatory issues, a
shortage of space at major airports, a lack of training
institutions and high attrition rate of skilled labour
due to the growth of MRO activities in Middle East
and Far East.
Menon argues that the competitive advantage
o ered by low-cost labour is outweighed by other
negative factors. Even so, optimism remains that the
Indian MRO sector could still grow at 15 percent
Recent analysis by Aeronautical Society of India
(ASI) estimates that the annual MRO market in
India is poised to grow from less than US$1 billion
now to about US$2.6 billion by 2020. Based on
current trends, it is projected that over the next
ten years India could surge ahead of today s leading
markets in North America and Western Europe.
" e opportunity and challenge for India is to
position itself as a complete regional MRO hub,
serving the broader Asia-Paci c region through the
advantages of faster turnaround times, a rich pool of
engineering expertise and lower labour costs," says
Kapil Arora, partner for infrastructure practices at
consultancy Ernst and Young.
Studies of the Indian civil aviation sector show
that rising passenger numbers and expanding eets,
alongside the arrival of low-cost carriers in the market,
have opened up a range of fresh opportunities for
international MRO ser vice providers.
As a result, aircra manufacturing giants Airbus
and Boeing , as well as the Government of Singapore,
have been looking at the possibility of setting up
MRO facilities in the western Indian state of Gujarat.
e facilities could be located in a 2,500-acre Special
Economic Zone (SEZ) dedicated to aerospace and
avionics, now being promoted by the Government
Meanwhile, Cochin International Airport (CIAL),
the rst green- eld airport in India developed under
a public-private partnership, has been seeking a
partner with good credentials and a solid brand
for a new maintenance joint venture. The first
phase of this venture, estimated to cost 1.1 billion
rupees (US$24.7 million) will provide maintenance
facilities for narrowbody aircra and executive jets.
The airport s Cochin International Aviation
Ser vices (CIASL) MRO subsidiary will provide
infrastructure and logistics ser vices, as well as liaising
with the government, regulatory authorities and
airlines on the venture s behalf.
"The MRO market in India is experiencing
rapid growth, due to the increasing demand for
"At present less than 5 percent of the MRO work [for Indian
carriers] is carried out in India. It all goes abroad." -- Air
Works Executive Director Ravi Menon
AsianAviation | JULY-AUGUST 2011 37
India's airlines are expanding rapidly, creating new demand for MRO services.
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