The MRO is a joint venture between Air India and Boeing and a third party whose name is yet to be announced. The project will commence with an initial investment of $100 million.
Dinesh Keskar, senior vice president, sales, Boeing told FE, We are awaiting basic environment clearances from the government of India to start the construction for the facility at Nagpur.
The goal of this venture is to reduce maintenance costs for the airlines and improve their profitability.
The facility will be capable of handling current-generation aircraft such as the B777s as well as B787s. It will have a component overhaul division, electronics and avionics shops and will offer C and D checks in addition to structural repair and interior modifications.
As far as Air India is concern, a study is being conducted to decide the cash flow and the probable third party for the venture. The amount to be invested by NACIL (National Aviation Company of India Ltd formed after the Air India - Indian Airlines merger) for the venture will be decided on the specifications of the JV with Boeing.
The advantages of having an MRO locally is availability of skilled labour at affordable cost, said KN Unni, head of MRO at Air India.
Having an MRO in India is a smart business proposition for the players in the aviation sector. First, most of the airlines send their aircraft either to the US, Europe and Gulf destination for the regular maintenance.
If there is an MRO within the domestic skies, theoperating costs of the airlines will be reduced to nearly 60% because of the skilled labour available at $35 per hour.
Commenting on the same, Kiran Yadav, an aviation analyst and managing director, Aerobiz India says, Within three years, the fleet size of Indian Airlines will be around 600. If there is an MRO facility locally, the turnaround time of the aircraft will be faster.