Mumbai, December 14, 2005, Pr Sanjai (Business Standard)

With domestic carriers placing aircraft orders of over Rs 100,000 crore, a slew of international maintenance, repair and overhaul (MRO) companies are drawing up plans to set up shop in India.

According to industry analysts, the market for MROs in India, excluding Air-India and Indian Airlines, is estimated at over $100 million per annum.

Putting up an MRO facility that offers complete technical services solutions can cost anywhere between Rs 750 crore and Rs 1,500 crore.

In addition to Airbus and Boeing, global MRO majors Jordan Aircraft Maintenance Ltd (JorAMCo), Singapore Technologies Aerospace (ST Aerospace), Lufthansa Technik AG and Singapore International Airlines Engineering Company (SIAEC) are in talks with Air-India and Indian Airlines for setting up a facility in the country.

A senior Air-India executive confirmed that several MRO companies were in talks with the national flag carrier but nothing had been finalised so far.

The Foreign Investment Promotion Board has cleared the proposal of Lufthansa Technik for setting up a wholly-owned subsidiary, One Stop Airline MRO Support Pvt Ltd, to undertake provision of spare parts and consumables to be used in the maintenance, repair and overhaul of aircraft.

According to industry sources, Lufthansa is targeting legacy carriers, start-up and low-cost airlines of India and West Asia who do not want to invest heavily on technical services.

They said JorAMCo, an MRO firm that specialises in Boeing and Airbus aircraft, was in discussion with Indian government and companies to set up an independent MRO facility in the country.

"The aerospace arm of Singapore Technologies Engineering (ST Engineering), ST Aerospace and SIAEC are also exploring all possible routes for setting up MRO facilities in India. Airbus and Boeing are also in the process of finalising the project," the sources added.

Airbus and Boeing are all set to sell aircraft worth Rs 45,000 crore to Air-India and Indian Airlines and each of the two rivals might set up a MRO to service these aircraft.

Air-India is planning to set up a ground handling and cargo engineering facility for its own aircraft as well as for others in Bangalore. In view of its fleet acquisition programme, Air-India is also planning a engineering base at Bangalore International Airport Ltd.