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Finally, maintenance repair and overhaul takes off with Boeing landing
MIHAN: The trial run of newly constructed taxiway and MRO unit of Air India conducted successfully
NAGPUR: Air India Engineering Services Limited (AIESL) hopes to beef up its third party business through the aircraft maintenance repair and overhaul (MRO) depot at Mihan-SEZ. Much of AIESL's current turnover of Rs 2,000 crore comes from the parent company — Air India.
AIESL is now waiting for an approval from the Directorate General of Civil Aviation (DGCA) for the Mihan MRO to start operations. Based on the initial application, DGCA wanted certain steps to be taken. The directions have been followed, with an action taken report also submitted to the aviation regulator, AIESL CEO HR Jagannath told TOI.
He said the final approval is expected within a fortnight, after which the MRO will be formally inaugurated. Once the DGCA approval is secured it is planned to move applications with the Federal Aviation Authority and European Aviation Safety Agency (EASA).
The company plans to inaugurate another MRO at Hyderabad, with one already operational at Thiruvananthapuram. However, the MRO at Nagpur is said to be the best in South East Asia and also the largest in Asia. It has the capacity to accommodate 2 wide-bodied and four narrow-bodied aircraft.
Initially, a DGCA approval has been sought for the Boeing 777 aircraft, to be followed by that for Airbus 320, and Boeing 737 aircraft. The two international approvals are expected to be secured in the next six months. DGCA will also be later approached for an approval to conduct D level maintenance, which involves ripping apart the entire aircraft.
There is a big market for Boeing 777 series, which are mainly used by Air India and Jet Airways. "However, 777 is just to start with and showcase the capabilities, the real business will be from 320 and 737s," said AIESL executive director (engineering) SN Ojha.
To start with, AIESL will focus on in-house business followed by that from other domestic airlines and finally foreign carriers operating within a flying distance of five hours from India, the officer said.
A March report by consultancy firm KPMG estimated India’s current MRO market at around $700 million. Indian airlines are expected to double their fleet by 2020, which would call for a strong domestic MRO industry. The report pointed out that merely 5-10% of the MRO work for domestic scheduled carriers is carried out in India, with the rest outsourced to third-party service providers outside the country.
“We have invested $17 million in Hyderabad facility while another $13 million is invested for aircraft engine MROs in Delhi, Kolkata and Mumbai. Nagpur MRO can handle GE 90 and General Electric GEnx engines,” the second Air India executive said. The airline has also invested $13 million at Thiruvananthapuram in Kerala to repair narrow body planes, he added.
Air India has already secured the contract to do minor maintenance check of Vistara airline, floated by Tata Sons Ltd and Singapore Airlines Ltd. Vistara is awaiting final clearances from the Indian aviation regulator and plans to start flying by this year end. The same executive added that Air India’s financials will improve after it hives off the MRO company into a separate unit.
Built at an estimated $107 million, the facility is ready for transfer to Air India, albeit with a delay of three years. The facility, sprawling across 50 acres, can accommodate three widebody aircraft such as Boeing B777 or Airbus A380 model at a time.
With the MROs at Nagpur, Hyderabad and Thiruvananthapuram, AIESL is eyeing almost 50% of the $2.5 billion maintenance business from India and abroad in the next five years. Currently, the Indian market stands at $1 billion, most of which goes abroad.
From the Nagpur MRO, there is an initial estimate of Rs 100 crore, however, it may be too early to conclude on any figures, said Ojha. The first year may see five Air India aircraft coming to the MRO.
AIESL is also coming up with an engine workshop next to the MRO here. With this, both Boeing 777 aircraft and its engine will be overhauled at the same place. By 2017, work on maintenance of the GE-90 engine fitted in the 777 aircraft is expected, followed by that for GE-NX used in the Dreamliners.
Turbulent flight path
* MRO at Mihan is part of offset deal struck between Air India and Boeing, when the former purchased 68 aircraft from this American aircraft maker
* Declared in early 2006, MRO was promptly showcased to woo investors in Mihan-SEZ
* At the same time, it also got political mileage for the then civil aviation minister Praful Patel
* He ensured that Boeing chose Nagpur for the project, though other sites such as Hyderabad were also considered
* Construction started in 2011 but deadline was missed thrice
* One of the reasons was the taxiway linking the MRO and airport was not ready
* Work on taxiway was blocked by PAPs for long periods
* The 2.6km taxiway was needed because the second runway, which was originally proposed to link the MRO, could not materialize
* Boeing was supposed to run the MRO on its own
* Plan changed later with Boeing's role being limited to construction and Air India Engineering Services Limited taking over the operations.
* Separately, Air India will build an engine MRO unit along with engine maker General Electric Co. for $89 million, next to the airframe MRO facility built by Boeing. The airline has acquired 50 acres for the purpose. The company is also investing in similar facilities in Hyderabad, Kolkata, Mumbai and Delhi.
* Air India is trying to create a one-stop shop for maintenance, repair and overhaul of airframes and aircraft engines. Once all MROs are operational, Air India will offer these facilities to third parties to shore up revenue.
* Firstly, MRO in Nagpur, which is Asia’s largest facility, will decongest Mumbai airport as there is no more space left for hangars. Second, as the MRO is situated in MIHAN (Multimodal International Cargo Hub and Airport at Nagpur) special economic zone, the cost of repairing would be lower compared to other MROs. Lastly, Air India MROs can offer these facilities to other domestic and international airlines.
Source:- Finally, maintenance repair and overhaul takes off with Boeing landing - The Times of India
Air India set to open Asia’s biggest MRO facility - Livemint
