Lufthansa Technik, the world? s largest maintenance, repair and overhaul (MRO) company, will set up a facility in the country, in a joint venture with the Hyderabad-based GMR group. This will be the country?s first foreign-owned, airport maintenance facility.

In the joint venture, Lufthansa Technik will have a 75%, stake, while the rest will be held by its Indian partner. Both the companies are expected to invest Rs 100 crore in the venture in the initial phase. The 20,000 square meter facility will be located at the New Hyderabad International Airport in Shamshabad, Andhra Pradesh

The facility will provide base maintenance services (including C- and D-checks) for Airbus A320 family and Boeing 737 aircraft?including 737 Classic and 737 NG (next generation) and is expected to commence operations by the end of 2008. At present, Lufthansa Technik serves the Indian carriers through its facilities outside the country. The Indian MRO market is projected at around $100 million a year at present, and is expected to grow by at least 15% over the next three years.

An MRO ideally needs around 200 aircraft to be viable A report by Ernst & Young has stated that the aviation sector in India, is slated to draw an investment of more than $120 billion by 2020. With the government allowing 100% foreign direct investment in the MRO sector, analysts expect large investments to flow in. According to aviation analysts, India is expected to see at l east 9 new MRO facilities, including those by Airbus and the Boeing Company and a host of Indian carriers.

The Indian civil aviation sector has around 400 aircraft on order, making it one of the world?s fastest growing aviation markets and this is expected to double over the next couple of years. Most of these aircraft are serviced outside the country.

Effective immediately, the company will commence training to develop highly qualified technicians and aircraft engineers. ?There will be two parallel lines to serve the maintenance requirements of the rapidly growing narrow-body fleet of Indian carriers,? a Lufthansa spokesperson said.

A dialogue with technical institutes in the state of Andhra Pradesh has already been initiated. The firm is looking to employ a staff of around 400, for its technical operations and hopes to establish Hyderabad as a hub for its operations.

According to the company spokesperson, the new venture will be a member of Lufthansa Technik?s existing worldwide MRO network of 28 ventures. The company has Jet Airway?s entire Boeing 737 fleet?49 aircraft altogether, with 45 being 700, 800 and 900 types?with its total component maintenance product. In addition, a landing gear support contract, comprising the overhaul of 14 shipsets, was signed last year.

Lufthansa Technik?s total component Support (TCS) was contracted by Jet Airways for the support of three Airbus A340-300 jets, including personnel assignments for the ground handling of the aircraft in India and abroad. To expand its role in the long-haul business, Jet airways has ordered a mixed fleet of 12 Airbus A330 and 13 Boeing 777 jets. Ten of these wide-bodied jets are already operational, with Lufthansa Technik providing TCS for both fleets. Through Lufthansa Technik?s subsidiary, Lufthansa Technik Services India, in Bangalore, Lufthansa Technik has provided home base components as well as personnel assignments of key engineering positions to Jet Airways.

Another client of Lufthansa Technik is the Vijay Mallya-promoted Kingfisher Airlines. The company provides a comprehensive MRO package.

Kingfisher is currently operating the Airbus single aisle class aircraft for which Lufthansa Technik provides TCS for the entire fleet, with a support contract that also covers consumables and expandables. Lufthansa Technik?s airframe related components (ARC) is also part of the package. Lufthansa Technik also provides Kingfisher its aircraft production inspection program (APIP) for the A320 fleet, and the coming wide-bodied A330 and A340 aircraft.

Apart from this, Lufthansa

Technik also provides TCS to the country?s first low cost carrier, Air Deccan for its fleet of Airbus A320 aircraft, in a ten year contract. With Kingfisher?s acquisition of 46% in Air Deccan, the contract with Lufthansa Technik is also expected to increase in the near future. Go Air, the domestic low-cost carrier currently operating a fleet of leased A320 aircraft, which are soon to be replaced by new twin jets of the same type, is also a client of Lufthansa Technik.