Page 22 - AAA OCTOBER - DECEMBER 2019 Online Magazine

According to industry experts, establishing
inventories has been a very serious problem.
With thousands of components for each type
of aircraft, any MRO which wants to be a global
player must be able to cater to at least 50 per-
cent of the normal requirements of an aircraft.
AIESL is believed to be capable of meeting only
25 percent of the business requirements as
of now. That means putting up money for the
components, the test bays, the software and
the licences. According to estimates, AIESL will
require around $250 million to upgrade itself
as a world class MRO.
AIESL meanwhile, has firmed up plans to open
a MRO unit in Muscat, Oman, from where it
expects to generate labour revenue of at least
US$500,000 per annum. The Muscat MRO will
be a part of AIESL’s overseas expansion plan
under which it first opened an international
branch in Sharjah, United Arab Emirates (UAE). Positive Steps Needed
“Based on the experience and backed by cost Former president and managing director of Airbus Pierre de Bausset
benefit analysis, the opportunity to expand to says, “development of MRO units in India is not happening at a pace
other international stations will also be explored. as it should. I haven’t seen local investors invest full-fledgedly in
At present, the report for Abu Dhabi, Ras Al MROs. If it hadn’t been on taxes and royalty at some airports, which
Khaimah, Muscat has been prepared to start have made it uneconomical for MROs in India, we wouldn’t see so
AIESL line maintenance operations and achieve many airplanes fly abroad for MRO services.” Two main airports of
profitability,” the company official informs. Delhi and Mumbai charge rents which are 50-100 percent higher
than that charged at equivalent facilities in Europe and Turkey.
Arun Kashyap, executive vice president
and head of Engineering & Maintenance for “The Airport Authority of India (AAI) should allow MRO work to
SpiceJet, which was one of the first private happen at its airports across the country. Although this is permitted
airlines to get the AIESL services says, at their airports, detailed rules and regulations make it practically
impossible. The space needs to be made available at reasonable
“We request companies offering MRO ser- rents and procedures simplified for MRO work to be carried out,”
vice to set up a facility in India. We need more says an industry official, who didn’t want to be named. He also
volume. The ‘Make in India’ program should argues that rents at the two main airports of Delhi and Mumbai
look at attracting work from South East Asia need to be rationalised.
and the Middle East, as India, with its growing
aircraft fleet size, strategic location advantage, High Charges
rich pool of engineering expertise, and lower The two main airports also impose about 20 percent royalty charge
labour costs has huge potential to be a global on maintenance work at the airports. And the demand by the
MRO hub.” So why has the MRO in India failed MRO industry to the government to slash these rates was sternly
to take off despite a new government policy to objected by these operators. The MRO industry also has urged the
give a push to the sector. Indian government for a reduction in the tax burden on the sector,

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