By Ameya Joshi
Air India signed the deal for 190 MAX aircraft with Boeing in 2023, after taking over Air India in January 2022. The aircraft was back from a major grounding post two deadly crashes and customers were not willing to induct them, especially in China. The pandemic in between meant that a few airlines were bankrupt too. The aircraft, known as “White Tails”, in industry parlance made their way to India one by one. Interestingly, they made their way to Hyderabad at GMR’s MRO to get scrubbed and repainted in the new Air India Express livery. Imagining MRO operations in India even a decade ago was difficult. From the first era of privatization in the 1990s to the second one of 2003 onwards, airlines have relied on foreign MROs for mandatory checks, heavy maintenance and repainting. Not only was the capacity a challenge, but availability, taxation structure, manpower – just about everything was a challenge. A handful still operated like Air Works, one of India’s oldest.
Things are rapidly changing though, India’s civil aviation sector has witnessed unprecedented growth in recent years, fuelled by rising disposable incomes, expanding connectivity, and government initiatives. This surge in air travel has naturally led to a corresponding increase in the demand for Maintenance, Repair, and Overhaul (MRO) services. While India possesses the potential to become a global MRO hub, the sector needs handholding to overcome challenges that hinder its full potential.
The MRO industry plays a pivotal role in ensuring the airworthiness and safety of aircraft. It encompasses a wide range of services, from routine checks and component repairs to engine overhauls and aircraft painting. A robust MRO ecosystem is essential for the efficient operation of an airline and contributes significantly to the overall health of the aviation industry. India, with its large aircraft fleet and growing number of airlines, offers a lucrative market for MRO providers. The current fleet stands at a little over 800 aircraft, even though a few remain grounded, while over 1000 planes are on order from now until the next ten years.
Despite the promising outlook, the Indian MRO sector has lagged behind its global counterparts. Several factors have contributed to this. Firstly, the high cost of doing business, including taxes, labour, and infrastructure, has discouraged foreign investments. Secondly, the absence of a level playing field for domestic and foreign players has created an uneven competitive landscape. Lastly, the lack of skilled manpower, particularly in specialized areas like engine overhaul, has hampered the industry’s growth.
Change is coming
The scenario is changing rapidly. The government has recognized the importance of the MRO sector and has taken steps to create a conducive environment. Initiatives such as the National Civil Aviation Policy, which aims to make India a global MRO hub, have generated optimism. Moreover, the simplification of tax structures and the easing of foreign investment norms have boosted investor confidence. From Air Works as the primary MRO over a decade ago, today GMR’s MRO at Hyderabad is attracting foreign airlines, apart from servicing Indian ones. This has a double impact. First, it saves foreign exchange for airlines and the country and secondly, servicing foreign carriers helps gain foreign exchange for the country. Another shot in the arm for the MRO industry was setting up of Boeing’s facility in tie-up AIESL at Nagpur as part of the Air India wide-body deal in the 2000s. This has helped undergo checks on widebody aircraft within India. AIESL, still a government entity, has started servicing foreign clients.
For aircraft to be serviced by Indian MROs, certifications from the Federal Aviation Administration (FAA) and the European Aviation Safety Agency (EASA) are essential. The Indian MRO sector is at a crossroads. With the right policies and investments, it has the potential to become a global powerhouse. By addressing the existing challenges and leveraging its strengths, India can create a thriving MRO ecosystem that supports the growth of the aviation industry and generates substantial economic benefits. GMR, for example, has moved up the value chain with a contract with Boeing to be the authorized base for the conversion of passengers to freighter as part of the BCF program which stands for Boeing Converted Freighter.
Indemar’s operations at Nagpur are expanding and Nagpur from being the centre of India, is slated to become the centre of the MRO industry in India as well.
Investment by Airlines
Passengers taking off from Bengaluru notice a large hanger with the IndiGo logo, which services IndiGo aircraft. IndiGo also has a hangar in Delhi. The privatized Air India has also earmarked space at Bengaluru as part of its deal with Bengaluru airport. In the old days, Air India had the capability on its own for most of its aircraft and over the years, India lost the capability it once had.
Considering Akasa Air is too small right now and SpiceJet faces serious headwinds, the focus of aviation in India will now be IndiGo and Tata group of airlines and both investing in MRO space is an indicator of what lays ahead. The journey ahead is undoubtedly challenging, but the rewards are immense. As India continues to expand its aviation network, the demand for MRO services will only increase. By seizing this opportunity, India can establish itself as a preferred destination for aircraft maintenance and repair, contributing to its vision of becoming a global aviation hub.
Ameya Joshi is an aviation analyst and columnist who runs the analysis website Network Thoughts.
