To tap opportunities in the defence MRO segment, Air India Engineering Services today joined hands with Tribhuvan Technologies for a strategic partnership to help the national carrier diversify its revenue stream.
As there are not many Maintenance, Repair and Overhaul (MRO) facilities in India, the segment provides significant growth opportunities. While Air India does all these work within the country, most airlines carry them out overseas, at a much higher cost.
For the venture, Air India Engineering Services Ltd (AIESL) has tied up with Tribhuvan Technologies, part of the diversified SREI group.
The partnership is likely to enhance the existing business of AIESL by adding new but complementary products and service portfolio, Air India said in a release.
“The venture will primarily focus on the entry into defense MRO business and aircraft component and aviation equipment leasing business,” it added.
Through the partnership, AIESL would also look to expand its customer base.
Tribhuvan Technologies is the aerospace and defence arm of Kanoria Foundation.
AIESL’s Chief Executive Officer H R Jagannath said it would be a “major step” if the opportunities come through as expected.
“If we move to the defence side and if what we hope comes through, it will be a major step forward. We are having some expectations… We have always been dealing with the civilian side,” he noted.
Noting that AIESL has the captive business of Air India, Jagannath said this expertise can be used for MRO works of aircraft, mostly from the Air Force.
“In Air Force, most of the aircraft are from Russia and historically Air India never had a Russian aircraft. It is a new line of business. If they (partnership) can garner the Air Force business and also get the OEM (Original Equipment Manufacturer) of these aircraft to support us, then sky is the limit,” he said.
Presently, AIESL provides line maintenance support to around 30 domestic and international airlines at various stations in India.
It has contracts with GoAir and Jet Airways for carrying out maintenance jobs and a pact with SpiceJet is on the anvil. AIESL also does some business in the defence space.
Tribhuvan Technologies is working on setting up of India Defence Offset – VC fund wherein international defence suppliers can invest up to 25 per cent of their offset obligation in the fund. It also provides funding to defence companies.
The agreement for the partnership was signed by Jagannath and SREI Infrastructure Finance’s Vice Chairman Sunil Kanoria.