Author: AVM SN Murti (Retd)
HISTORICAL PERSPECTIVE
The History of aircraft MRO goes back to the day of Indian independence 15 Aug 1947, when No.1 Aircraft repair depot was formed at air force station Kanpur. Later this was merged with aircraft storage unit to be known as No.1 Base Repair Depot on 09 Aug 1948. This base repair depot has a unique distinction for having designed, produced and flown two twin seat aircraft called Kanpur I and Kanpur II. Then Defense Minister VK Krishna Menon was invited to look at this aircraft. He was overjoyed and in appreciation he remarked, “only aircraft factory in the country is yet to do anything as impressive as IAF Kanpur”. Obviously, his comments were on then Hindustan Aircraft Limited (HAL). This comment did not go well with then Director Technical Development & Production (Air) and Kanpur-I was not granted airworthiness certificate. There are several such instances and reasons in the history of Indian Aviation, that affected the momentum of growth. First Civil aviation MRO Indamer was started in 1947 followed by Air Works Group in1951.
The Civil aviation Operations began on 18 Feb 1911 when First commercial flight from Allahabad to Naini was flown by Monseigneur Piguet, a French pilot, who carried 6500 mails on a Humber biplane. This is considered to be the beginning of civil aviation in India Thereafter, Civil aviation achieved several milestones. By 1947 at the time of Independence, nine Air Transport Companies were operational. These airlines were operating within and beyond the frontiers of the company (East India Company), carrying both air cargo and passengers. It’s quite evident that there was substantial progress in aviation operations, before the first aircraft MRO was established in the country.
MRO BUSINESS IN INDIA
It is a matter of pride that India has surpassed Brazil and Indonesia to become the third largest domestic aviation market globally (28 Jun 2024, India Brand Equity Foundation). It is also heartening to note that India’s safety oversight ranking has jumped to 55th position from its dismal position of 112th as validated by ICAO. Somehow, such growth is not reflected on aviation MRO. Indian share of MRO market is just 2.4 % of the global market and is likely to be 3.3% by 2031. Whereas, some of the countries in south – east Asia and middle-east have shown more progress.
It is evident that India is well ahead in capturing the commercial aviation market and has shown considerable improvement in ensuring safety. It should be a matter of concern for all those involved in MRO activities, starting from policy making down to the skill levels of the technician working on the aircraft. The growing number of airlines, both domestic and international are contributing to the expansion of the MRO industry. The MROs growth is poised to take off and India is at the cusp of becoming one of the leaders in aviation MRO. However, certain aspects need to be tweaked, at this right moment for gaining maximum momentum. Some of the key factors in this direction are:
GOVERNMENT POLICIES
The Indian government has introduced National Civil Aviation Policy that would promote the MRO sector. The policy aims to attract investments, enhance infrastructure by simplifying regulations. This could further be boosted by including MROs as part of Defence contract, offset clause. Offset ensures 30% of contract value is ploughed back into the country. There should be policy alignment towards this in relevant manuals and procedures for new aircraft inductions in service of civil aviation. The priority for offset investment should be in setting up aircraft and component MRO.
Rise in Demand for Maintenance Services
There has been a significant increase in demand for domestic MRO services. Several Indian companies have invested in developing state-of-the-art facilities, including hangars, workshops, and equipment. India has 130 Non-Scheduled and Private Operators, combined together they operate 330 aircraft. Most of these operators prefer to enter into long term maintenance programmes for spares and engines with the OEM. These operators send their aircraft abroad for heavy maintenance as crafted in their Maintenance and Spares Plan (MSP) and Engine Availability Plan (EAP). GOI has exempted the import duty on aircraft brought into India under NSOP. In return these operators should be insisted upon selecting all maintenance under MSP and EAP be sourced from Indian MRO. The OEM must support operators in choosing an Indian MRO and help establishing and obtaining regulatory approvals by providing the required equipment and training the manpower through a policy decision. This would ensure development of MRO capability for General Aviation (GA) Sector. Few of the GA aircraft are platforms for airborne sensors used by military services for surveillance and their major maintenance can be undertaken within the country. This would eventually help in strategic interests of India.
Low Cost and Taxation
Availability of skilled manpower at competitive rates, favourable exchange rates, and low overhead costs are some of the factors that are in favour and India can be an MRO hub. Further, reduction in GST to 5% from 18% and revision in rental and allotment of land at Airport are some of the Policy changes that has made Indian MROs cost Competitive. Further, the government has announced new incentives in the Budget 2024 to strengthen maintenance, repair, and overhaul (MRO) operations across India’s aviation and shipping sectors. Recent decision of GOI to levy 5% uniform Integrated Goods and Services Tax (IGST) rate of 5% on every aircraft and the parts of aero-engine will enable further reduction in maintenance cost in India.
International Collaborations
Collaborations and partnerships with international companies has seen growing expertise, advanced technologies and practices. These collaborations have helped in raising the quality and capabilities of the Indian MRO industry. AAR-Indamer Technics, Airbus-Indamer collaboration for helicopters, HAL-Airbus for A320 and TATA- Lockheed Martin are some the examples. Increased collaboration is likely to attract business share of foreign operators.
Expansion of Infrastructure
India has witnessed infrastructure development, including the establishment of dedicated MRO facilities and maintenance bases at various airports across the country. This expansion has increased the capacity to handle a greater volume of aircraft maintenance and repairs, adjacent to the major international airports.
Regulatory Support
Skill Development
There are 108 training centres accredited by Aerospace and Aviation Sector Skill Council (AASSC). These centres are involved in capacity building by providing technical inputs and industry interface. The government and industry stakeholders have placed emphasis on skill development, to address the growing demand for skilled MRO professionals. This focus on skill development ensures a steady supply of skilled personnel for the industry. Formal education on Aircraft Maintenance is imparted through 49 institutes which are CAR-147 compliant and approved by DGCA. Not all these institutes are affiliated to a university therefore, a vast difference in standard of one institute to another is clearly seen. Standardising the curriculum under CAR-147 is one aspect of AME training, however, formal education by affiliation to a university should be made compulsory for overall development of the budding aircraft technicians and Aircraft Maintenance Engineer (AME). This is one area that require attention.
GIFT City and FDI initiatives of the GoI
Gujrat International Finance Tech (GIFT) City is the first smart city and International Finance Services Centre. It is poised to give aircraft MRO industry a significant boost. By setting up shop in GIFT city, MROs can tap into various incentives of Tax breaks, exemption of customs, simplified regulatory process etc. Further, Project Rupee Raftaar eases leasing of aircraft and engines under a single window. Leasing and de-leasing indirectly creates substantial job for MROs in terms of compliance, airworthiness, Maintenance management and smooth transition between lessee and lessor. Governments decision to allow 100% Foreign Direct Investment under automatic route is likely to see more and more investment in this sector.
CONCLUSION
The expansion of airline operations in India has resulted in larger aircraft fleet. As aircraft age and require maintenance, the demand for MRO services increase, creating opportunities for the industry to grow further. Recent orders of 1000 airplanes by AI and Indigo have drawn lot of attention in the media. In case the contracts cater to setting up maintenance facilities and supply chains, then large growth in MRO and training institutes will be visible in near future. the MRO industry in India is experiencing a study growth, driven by a supportive regulatory environment, increasing aviation market, infrastructure development, cost competitiveness, and collaborations with international players. The future prospects for the Indian MRO industry remain promising as the aviation sector continues to expand. Civil-Military cooperation can play role of a force-multiplier in the growth process.
REFERENCES
1. National Civil Aviation Policy, 2016
2. Deloitte, MRO in India-Poised to take off, November 2021, (file:///C:/Users/My%20PC/Desktop/Inds_International_Reserch_Forum/in-fa-MRO-in-India-Poised-to-take-off-noexp%202.pdf)
3. BRIEF, NITI Ayog, MRO in India-Trends, Challenges and way- forward, October,2022
4. http://www.dgca.gov.in (CAR-145, CAR-147, CAR-M & CAR-66)
5. AVM SN Murti, Civil Aviation Maintenance, Repair and Overhaul (MRO) Companies as Strategic Assets, Indus International Research Foundation, Yearly Book 2024.
6.Statistica: https://www.statista.com/outlook/mmo/shared-mobility/flights/C
