New Delhi. Agusta Westland has appointed Air Works as an authorized service partner in India for servicing its helicopters. The Italian company, which had recently received the approval from Director General of Civil Aviation (DGCA) for its commercial maintenance, repair and overhaul (MRO) operations in Hosur, near Bangalore, also plans to invest up to $40 million for setting up the additional hangars, the paint operation, and future engine/ component MRO activities.

Fredrik Groth, Chief Executive Officer, Air Works, said, “This agreement with Agusta will enable us to even better service the Agusta operators in India. Under this contract we will provide maintenance, repair and support services to owners and operators of Agusta Helicopters in India.”

Agusta Westland has over a dozen helicopters in the civilian sector in different categories including Grands, AW 109, AW 119 and AW 139. In the military sector there are 17 helicopters in the anti-submarine role and 6 for the commando operations. “The company has also become India’s first DGCA approved independent airline MRO and will perform services such as Line and Base maintenance, aircraft painting, structural repairs, cabin upgrades, and avionic upgrades. Air Works will also be offering component repairs and spare parts sourcing,”said Groth.

Air Works, which has been around in India for over 50 years, has experience in general aviation MRO and has a team of highly trained and motivated professionals. It is considered to be one of the best in helicopter maintenance and repair business in India.

Groth pointed out that Air Works is the first such MRO facility in India to have been approved by the DGCA and has been working tirelessly to build a strong aviation infrastructure in India.

The company is now all set to commence operations as India’s first commercial MRO facility. We are set to provide services to various airlines in India which so far have had to either build up in house maintenance capabilities or send their aircraft abroad for servicing.”

Airlines which have been sending their aircraft out of India would now after studying the market will seek maintenance services within India.“We have the state of the technology along with expertise in narrow frame servicing, and we have knowledge in the structural airframe and we are hopeful get a share in the growing market in India,” Groth added.

This is a labour intensive industry and currently the trend is in house MRO. Jet Airways and Air India have their own setups. Air Works also will be offering component repairs and spare parts sourcing. While the company has no foreign third-party MRO partner, it recently announced an authorized service center agreement with Honeywell for maintenance, repair and service facilities for Honeywell’s TFE 731 and CFE 738 series engines along with auxiliary power units [APUs].

The company’s commercial MRO in Hosur presently has one hangar capable of housing two ATR 72 size aircraft or one narrow body aircraft, and with 13,000 square feet of office and back shop space. The airport has a newly extended 7000 ft x 150 ft runway, capable of accepting all commercial aircraft types. The company will start operations with one existing hangar and will soon build two more hangars to be ready by no later than year end 2009.

Considered as India’s Gold Standard, Air Works General Aviation MRO is the largest in India with over 60% market share. Starting with the maintenance and over haul work on a few DC-3s in the early 1950s, the company currently does DGCA approved maintenance on over 75 aircraft including Gulfstream, Bombardier, Dassault, Hawker, Cessna, Beech and others.

At present, Air Works has its helicopter servicing and maintenance facility at Mumbai International Airport, Delhi and Chennai. In addition, it also supports Helicopter maintenance and repair services in other cities such as Bangalore, Hyderabad and Pune.

The company would start operations with the existing hangar and soon build two more “no later than 2009 end” at the Hosur airport, which has a 7,000 feet runway capable of accepting all types of commercial aircraft. “We have plans to pump in $40 million into the project”, Groth said, adding that the funds would be put in to set up the additional hangars, the aircraft painting operations as well as for future engine and components facilities.

Air Works India was founded in 1951 by B G Menon and P S Menon, who are recognised as two of the pioneers who contributed significantly to the development of business aviation. Starting with maintenance and overhaul work on a few Dakota DC-3s, Air Works has since been on a significant growth path, expanding in the areas of General/Business Aviation Maintenance Support, Commercial Aircraft Maintenance and Support and Aircraft Sales and Charter.

In November 2007, Air Works attracted two strategic investors to broaden the equity and strategic reach of the Company. The investors include Global Technology Investment Group, LLC, a New York-based Private Equity firm and Punj Lloyd, a transnational company specialising in the energy and infrastructure sectors, headquartered in Gurgaon, India.

Going forward, Air Works plans to invest an upward of $50 million for setting up the infrastructure to support the growth of all its activities.

Close on the heels of Lufthansa Technik pulling out of business in India, Air Works has become India’s first independent MRO provider approved for commercial operations by DGCA. Air Works expects to get its DGCA certification for Airbus A320s and Boeing 737s by January 2009.

It also has applied for FAA/EASA certification, which it hopes to get in the next six months, Groth, CEO said.

The company is set to announce its first customer by the second week of December.

Air Works will also service Honeywel l ’ s nav igat ion and communication equipment. A joint venture with Air Livery as its partner has resulted in an upcoming dedicated paint hangar — tip to tail livery change — to be launched in late 2009 with an investment of $2 million. About 30% of the paint business will be tapped from the Middle East, which is Air Livery’s major market, explains Groth.

In a recent study titled ‘Indian Airports - Global Landing Ground’ by international audit giant KPMG has revealed the upbeat side of aviation downturn. The ground story is that slump is a good time for airport infrastructure to grow. The “Aerotropolis”, or Airport City, concept will self-sustain this growth story as aviation recovers.

Despite the present economic slump, air travel growth in the country is estimated at 8 per cent annually, which would put Indian aviation among the fastest growing in the world. The study reveals that the current downturn provides an opportunity to bridge the supply gap in the aviation infrastructure requirement and India should be ready for the next wave of growth. Investment in airport infrastructure development is the need of the hour for Indian aviation sector, as nonaeronautical components to drive revenue in an ‘Aerotropolis’. With less than 5 per cent of the Indian population currently travelling by air, there is a large untapped market, which could continue to fuel growth in the sector. To capitalize on this opportunity, the key stakeholders in the airports industry need to focus on enabling regulations and infrastructure for low cost carriers.

The slowdown in aviation industry has hit the fortunes of state-run Airports Authority of India (AAI) hard. The country’s biggest airport operator fears a 10% to 15% drop in revenue this financial year over last year’s figure of Rs 3,000 crore, at a time when projects worth Rs 12,500 crore need to be executed in the 11th Five Year Plan and Rs 3,400 crore investment is required this year.

The drop in revenue projections may also force AAI to revise upwards its earlier projection of raising Rs 2,650 crore from the market in 2008-09 and 2009-10.

Private airport developers like GMR and GVK are also facing the heat due to revenue crunch caused by drop in air traffic. On top of reduced revenues, the Mumbai and Delhi airports have dues of Rs 80 crore each from airlines. AAI’s outstandings are nearly Rs 1,200 crore.

While airlines the world over struggle to stay afloat in the rough economic weather, aircraft MRO majors that were looking at India as a ready to move in market also seem to have slowed down with their plans.

Nonetheless, Buoyed by the booming aviation sector with new and existing airlines ordering more than 400 planes, aircraft manufacturing giants, Boeing and Airbus were among the leaders keen on setting up MRO facilities in India.

At the height of aviation boom, several companies including Lufthansa-led Lufthansa Technik - were looking at MRO and whole sale trading in aircraft components. But bleeding balance sheets, rising costs and low passenger loads have forced many airlines to defer expansion plans.

A joint venture agreement between the National Aviation Company of India Limited (NACIL) and the EADS (European Aeronautic Defence and Space Company) several other companies that had evinced interest earlier are now “waiting for the right time to enter the Indian market.

“What attracted the MRO industry to India was cheap labour and a huge market but the downturn and a relatively new fleet have discouraged players,” felt KPMG executive director Rajiv Batra.