Page 16 - AAA SEPTEMBER - OCTOBER 2014 Online Magazine
P. 16
MRO INDIA
FEATURE MRO INDIA
Outbound Maintenance
India’s airlines look abroad for their MRO needs, writes JK Chandra
LACk OF FORwARd LOOkInG pLAnS excessive custom duties, service tax
and a poor appreciation of the ground on labour, central and state taxes and
realities in the aviation sector by the Indian a bewildering maze of regulations.
government have hobbled the growth of These issues negate the significant cost
the Maintenance, Repair and Overhaul advantage and faster aircraft turnaround
(MRO) sector in the country. According time that Indian MRO’s can offer to
to an Indian aviation report released by customers at home and in the region.
FICCI-KPMG, earlier this year, out of the Typically, a ‘C1’ check performed by
USD 700 million (Rs 4200 crore), Indian an MRO firm in India would cost about
MRO market, “merely 5-10% of the MRO half of getting it done in Europe. A ‘C1’
work for domestic scheduled carriers is check is carried out an airliner every 24
carried out in India”. In fact, as recently as months.
2012, less than 5 percent of MRO work for A senior executive from an Indian
Indian carriers was carried out in India. carrier told AAA that “As fleets’ increase,
An outdated and restrictive tax the need for MRO activity in India will
regime along with poor infrastructure increase. However, there are challenges
and incentives, has meant that apart in taxation that encourage Indian carriers
from a few exceptions, Indian MRO firms to take their aircraft out of India.”
Despite the constraints of struggle to remain competitive and Indian domestic airlines, finding it more
setting up at MRO in India, primarily offer services for business jets attractive to meet their maintenance
companies like Airworks and helicopters operated by business needs from abroad and have inked
have developed extensive houses and charter firms. MRO long-term maintenance agreements
capabilities and are well operators are saddled with additional with foreign MRO’s. As a result, Indian
placed for future growth costs ranging from high airport charges, MRO firms will need to wait till 2020 at
16 ASIAN AIRLINES & AIRPORTS SEPTEMBER / OCTOBER 2014 WWW.ASIANAIRLINES-AIRPORTS.COM
