Indian Aviation MRO Industry : Insights and Opportunities

Maintenance, Repair and Overhaul (MRO) activities in India provide competitive advantages to various global and local players with rapidly growing aircraft fleet and the increasing age of Indian aircrafts. Aerospace MRO segment attracts less investment in technology and facilities as compared to other aerospace sub-segments. The MRO sector is typically divided into four major segments, which include Airframe heavy maintenance and modification, Engine maintenance, Line maintenance and Component maintenance.

Several MRO companies like Lufthansa Technik, Hindustan Aeronautics, Air Works India, Hyderabad Aircraft Maintenance Company and Max Aerospace & Aviation service the market. The largest aircraft manufacturers (Airbus/Boeing) are also setting up their MRO service centers in India.

Airlines in India outsource MRO work worth $700 million to international firms every year. According to media reports, global MRO firms such as SIA Engineering and Lufthansa Technik generate 35-45 percent of their revenues from their MRO verticals and are expanding their reach in India. MRO services see great potential in the Indian market with a continuous growth of 15 percent on an annual basis.

Indian aerospace MRO market is dominated by independent service providers that focus only on aircraft maintenance activities. However, these companies may face tough competition with the entrance of major Original Equipment Manufacturers (OEMs) such as Boeing, Lockheed and General Electric.

Airlines in India spend close to about 13 to 15 percent of their revenues on maintenance. In terms of cost, engine maintenance constitutes a major portion of the MRO chain. Most of the India aircraft fleet consist of Airbus and Boeing aircrafts manufactured in Europe and USA, which are flown outside India for maintenance mainly to the UAE, UK, Singapore and Malaysia.

MRO Opportunities

·    Getting the aircraft serviced in India will save valuable fuel, logistics costs, and engine and component hours, thereby generating more revenue for the airlines. MRO industry in India can help domestic airlines save about 20-40 percent on the total costs on airframe maintenance as compared to the rest of the world. Domestic airlines in India are working on their capabilities to begin their own checks but lack of infrastructure forces the airlines to carry out major inspections outside India.

·   The success of the MRO industry basically lies in its manpower capability, as the major maintenance checks are more labor intensive; determining the efficiencies in output. With low labor costs and skilled manpower in India, the MRO market can grow at a fast pace.

·   Further with the OEMs and foreign vendors entering the Indian market with their technical and operational efficiency, MRO in India will have the capability to service general aviation aircrafts as well.