Indian MRO an untapped gold mine
India has an incredible and fast-growing aviation segment. One out of 20 widebody aircraft is delivered to India, and one can easily measure the magnanimity of MRO potential in the country. However, the industry feels if the government looks at the larger scheme of things, then it would be a game changer for the Indian MRO.
Renjini Liza Varghese
If I borrow the popular definition given to Indian MRO by the industry stakeholders, Maintenance and Repair Overseas and not Maintenance Repair and Overhaul, it mirrors the current Indian scenario. 90 percent of the Indian MRO work is being done outside India. Reason, blame it on the lack of MRO facility in India.
Interestingly, India is the fastest growing aviation market for close to three years now. It is the third largest domestic market and inching towards taking over Japan in the overall size of the market, both in domestic and international. The big two, the US and China, are still ahead of India, and it is expected that India would beat them by 2030.
In the last two decade, the Indian MRO market was growing consistently, and now the size is estimated to be of Rs 5,000 crore.
In this context, to analyse and tap into the growing potential a two-day conference was organised in New Delhi in January. The Aerospace & Defence MRO South Asia Summit witnessed participation from all segments of the MRO value chain. This summit, which is the first-ever event for the MRO industry, discussed the overall theme of "Make in India - MRO Makes it happen".
The tone of the conference was set in by Dinesh Keskar, senior vice president Asia Pacific and India Sales, Boeing, by delivering the keynote address.
“Till liberalisation happened and the private carriers came into the picture, the flag carriers Air India and Indian Airlines were handling their own maintenance works. When private players came into operations, especially with the used aircraft and some of them with old 737-200, the requirement for MRO went up," said Keskar.
“The market is here, the growth is here, and people (skilled workforce) are here. This opportunity in MRO should be tapped in time,” added Keskar.
The summit, on the one hand, focused on the conducive environment in India, while on the other, it discussed in detail the hurdles impeding the realisation of the MRO opportunities.
The 6 panels spread across two days witnessed intense debates and discussion around themes such as Make in India - MRO makes it happen; Defence MRO - Seizing the big opportunity; Internet of things, Big data analytics & Artificial Intelligence: strong tailwinds for future MRO; Key business drivers shaping the global MRO market in the next five years; Regulatory and government policy framework supporting Indian MRO; and Building a robust logistics and supply chain infrastructure for India’s civil &defence MRO.
Amber Dubey, partner and head of Aerospace and Defence at KPMG commented, “Buying new aircraft and starting new airlines are not enough. Nobody is going to buy a car in Delhi and take them to Chennai or Dhaka or Sri Lanka for servicing. Why are we in such a bad shape when it comes to MRO?”
Harpreet de Singh, executive director and chief of flight safety for Air India, said, “One needs to look at the financial viability, not for the MRO as such, but for the airline which is going to use the MRO. Getting repairs done domestically viz a viz the cost advantage of sending it overseas.”
AshishSaraf, vice president and Make in India officer, Airbus, was quick to add, “Why doesn’t it work? Taxation — it got better before GST, and with GST it got worse. We have people who have approached us to set up MRO in the middle of nowhere. But we require land near Delhi or Mumbai as none of the airlines would like to make a detour to get the repairs done. So the location becomes a key.”
Arun Kashyap, executive vice president and head of Engineering & Maintenance for SpiceJet, brought in the role of OEMs by saying that they need to pitch in here. "We request whichever company offering MRO service to set up a facility in India. We need more volume. Make in India should look at attracting work from South East Asia and the Middle East.”
“Logistics plays a crucial role in MRO industry and transporting engines by the surface is, of course, a challenge. But things are slowly improving,” said ShajiKarunakaran, chief engineering manager, Blue Dart Aviation.
Vivek Gupta, managing director, Interfreight Forwarders said, “The hurdles are many. The government needs to be more supportive of MRO services.”
Gagan Jacobs, power plant manager - Technical Services Department, Jet Airways, highlighted the issues the operators face when they try to move parts from state to state within India. “The official checks held back engines meant for a grounded aircraft for more than a week. This is not helping the air operator, but hurting the industry.”
BK Mehrotra, GM (Cargo) Airport Authority of India & COO AAI Cargo Logistics & Allied Services added, “More industry collaboration is required to address the challenges. A public-private partnership is the way forward.”
Shailendra Seth, director India, Chapman Freeborn pointed out the need for an active lobbying for MRO. “Unlike the US and other countries, India doesn't have a lobby that can influence the government.”
The experts commented that forums like this should collectively compile the suggestions and submit it to the relevant ministries. That will help them to frame encouraging policies.
Aerospace and Defence MRO South Asia Summit 2018 was organised by The STAT Trade Times and was supported by Air India Engineering Services Limited (AIESL), Aeronautical Society of India. The conference also had Ultra Aerospace, Ramco Systems, Compass Law Associates, and Avion World as its partners.