Skill development council coming up to check aviation manpower crunch

Written by Huma Siddiqui | New Delhi | Updated: Jul 16 2014, 14:04pm hrs
India is set to take the first major step to address the perennial problem of manpower shortage in the aviation and aerospace sectors by setting up the country's first Aerospace Skill Development Council of India. The council, which will bring together companies such as Jet Airways, SpiceJet, Indigo, Tata Aviation, Hindustan Aeronautics and institutions such as National Skill Development Council (NSDC) and Bangalore Chamber of Commerce, will create a platform that will allow companies to get skilled manpower as per their needs, and at the same time provide them an outlet to use their Corporate Social Responsibility (CSR) funds.

As per government estimates, over five lakh skilled workers would be needed in the aerospace and aviation sectors over the next 10 years while the current infrastructure of training institutions and high attrition rate of skilled labour due to growth of MRO activities in West Asia and the Far East is clearly found wanting to provide the necessary skill sets required by the sector. It is felt that unless steps are taken early to address the issue, the sectors growth would take a hit.

HAL has taken the lead to set up first such Council in India. All MROs (maintenance, repair and overhaul), major airlines and other industry players have been invited to join the council which will have 24 representatives of the sector, HAL chairman R K Tyagi told FE. We are bullish about this council and have started receiving confirmation from top players in the industry, Tyagi said.

The MRO industry is expected to triple in size from R2,250 crore in 2010 to R7,000 crore by 2020. India has the potential to be an MRO hub due to the growing aircraft fleet, location advantage and availability of talent. However, this future size may still be small compared to the present MRO industry size of other countries such as UAE (R8,000 crore per annum) and China (R10,000 crore per annum).

As per the plan, the proposed council will get a contribution of R4.9 crore from NSDC while HAL will put initial equity of R25 lakh. Private airline companies are also expected to contribute generously for the initiative as the government has allowed investment into the council to qualify as CSR spend by corporates. Under the new Companies Act, the corporate sector has to contribute at least 2% of three-year annual average net profit towards CSR activities, here to qualify.

Apart from the shortage of skilled workforce for the sector, the country has still not sorted out certification issues related to training of the required workforce. The certification, given by the Directorate General of Civil Aviation (DGCA), is not yet comparable with mandatory European standards. DGCA is now in the process of making its certification equivalent to the European Aviation Safety Agency (EASA), which is mandatory for MROs to serve international airlines.

According to a study, India is poised to become a large commercial as well as defence aircraft market. With rising passenger traffic and increasing military and defence expenditure, demand for aircraft will steadily increase, and with it, the opportunities for MRO-related activity.

Currently, overhaul of military aircraft is almost entirely undertaken by HAL. However, the Defence Procurement Procedure 2008 has outlined opportunities for outsourcing maintenance operations through the establishment of public-private partnerships.

Boeing, Airbus, Malaysian Airlines, Lufthansa Technik, SR Technics, Singapore Airlines and Timco are among companies which have either set up an MRO of their own, or are in the process of identifying a local partner for the same in India. Boeing will be building a $ 100-million MRO centre in Nagpur whereas European Airbus Company is planning to set up its MRO in Delhi by investing around $40 million. Bombardier, Embraer, Lockheed Martin and Raytheon are also exploring MRO opportunities in the country.