“India is primed to make huge strides in domain MRO,” says Jaideep Mirchandani
August 14. Ahead of Independence Day, the chairman of global aviation conglomerate Sky One FZE, says with its notable expansion in the commercial aviation sector, the nation could now extend its focus to aircraft spare parts and maintenance.
As India gears up to celebrate its 76th Independence Day, it stands proud as a major contributor to the global aviation community with substantial achievements. According to a recent Niti Ayog report – With a current fleet size of about 713 aircrafts and more than 1000 aircrafts planned to be added in the near future, India is poised to become the third largest buyer of commercial planes after the US and China. Owing to consistent augmentation in air traffic, strategic location and lower labour costs, the Indian Maintenance, Repair and Overhaul (MRO) sector presents considerable growth potential.
The exponentially rising civil aviation industry, therefore presents a strong case for the development of the MRO industry in India. Although at a nascent stage – the size of the industry being USD 1.7 billion as of 2021 – it is expected to reach USD 4.0 billion by 2031, registering a CAGR of 8.9% as compared to the global average of 5.6%.
Jaideep Mirchandani, the chairman of global aviation conglomerate Sky One FZE said, “The Indian aviation sector is primed to make huge strides and is expected to achieve robust growth in the near future. As the domestic fleet size increases to meet the demands, we expect a surge in MRO demand as it is a crucial support for any airline’s operations and safety. Currently, non-recognition of DGCA standards by European authorities has been a challenge for new entrants in the Indian MRO industry. However, I am sure that the authorities will identify and subsequently incentivize to give India a comparative advantage as the current environment is fertile for indigenous manufacturing and maintenance.”
While Indian MROs are competent in performing airframe maintenance, engine and component MRO services are procured from abroad. In India, airlines spend around 12% to 15% of their overall revenues on maintenance, making it the second highest cost for an airline. Mr. Mirchandai emphasised that growth of the MROs depends on many factors like the efficiency in value chains, offset clauses, credit accessibility, availability of infrastructure, licensing and certification, taxes/duties and land lease rentals etc. “Having robust MRO support would reduce foreign exchange outflow, increase employment opportunities and make India the centre for innovation in MRO capability globally. Airline operators would also enjoy reduced costs, better turnaround time and less inventories,” he added.
Prime Minister Modi also made a statement in February this year about the possibility of made-in-India commercial aircrafts, Mr. Mirchandani said, “India has the manufacturing potential to meet the growing demand for new aircrafts as it has been successfully producing aviation components. One of the most significant benefits that India provides to the rest of the world is the availability of highly qualified engineers with the capability of being trained for an array of technical activities. Another potential avenue for growth, according to him, is the establishment of assembly lines in India by foreign commercial aircraft manufacturers.
He added that redelivery maintenance is an important aspect of an airline and lessor’s MRO requirements, especially in India, where the sale-and lease-back model is common, “I believe that collaborations will aid in enhancing capacity and align the standards in line with the global best practices, however, to realize these aspirational dreams on a large scale, there is a need for significant capital investment and the active participation of both the government and private sectors.”
