Air India?s ambitions for a successful aircraft maintenance, repair and overhaul (MRO) business under its subsidiary Air India Engineering Services or AIES could be grounded due to problems of overstaffing. With an employee-to-hangar ratio of 200, and only 106 aircraft in its fleet, AIES will somehow need to attract a large amount of business from airlines in and around India to justify the large staff strength.
Air India, however, remains optimistic about the prospects of its engineering subsidiary. ?Apart from servicing Air India?s fleet of 106 planes, we expect 20-30% business to come from outside India,? said Air India?s director (finance), S Venkat. ?As the business grows, we think this should go up to 50%.?
?Although there are only two hangars under AIES, the subsidiary will have the right to use 35 hangars which are with Air India,? Venkat added.
The airline earlier this year transferred 7,400 engineers to its MRO subsidiary, who will carry out MRO services from 35 existing hangars of Air India and two new hangars of AIES being built in Nagpur and set up with the help of US aircraft manufacturer Boeing. The engineers will also carry out line maintenance at 64 airports in the country.
Existing domestic MROs like AirWorks and MAS GMR Aeronautical Engineering (MGAE) operate with a much leaner staff of 170 and nearly 300, respectively. The two by the end of the year will have a combined capacity to service 300 narrow-body planes a year. AirWorks also offers line maintenance at 8-10 airports across the country for international airlines.
Sources said that currently, AirWorks? capacity to carry out ?C? checks on aircraft at its hangar in Hosur, outside Bangalore, is nearly completely utilised. While the customers of AirWorks aren?t known, MGAE currently has medium- to long-term contracts with five customers ? GoAir, SpiceJet, aircraft lease company BOC Aviation and a couple of undisclosed key companies.
Despite a lean staff, sources said that both AirWorks and MGAE are able to get the aircraft back in the skies within two-three days.
According to latest data from the DGCA, there are 364 narrow-body planes and 55 wide-body planes in the country. Typically, ?C? checks, the most frequent business for MROs, happen once in two years for each plane.
?To get the amount of business for justifying the massive staff strength, Air India would need a lot of business from airlines outside India,? said a consultant with a global audit and consultancy firm on condition of anonymity. ?Getting those customers will be the biggest challenge for AIES, because they have to somehow offer better pricing and service than regional MRO rivals in UAE and Singapore.?
?With a high wage bill and customers being forced to pay 12% service tax, it?s really difficult to see how Air India will get the international customers it needs,? the consultant added.