The growing needs of the domestic aviation sector have led aircraft maintenance, repair, and operations (MRO) major Air Works Group to explore potential new opportunities to expand its services to the drone, component, and engine segments of the industry.
In an interaction with FE, Air Works Group’s MD and CEO, D Anand Bhaskar, said the growth in Indian commercial aviation, owing to new fleet inductions and improved airport infrastructure, has opened new opportunities in commercial MRO.
“We are looking at the emerging aviation landscape that comprises drones and VTOLs as well as related verticals such as components, engines, and logistics, given our 27-city pan-India network,” Bhaskar said.
“Although which of these and others become viable in the long run remains to be seen, opportunities in business aviation, and hopefully defence, will further complement those in commercial aviation,” he said.
Bhaskar said that the group is evaluating all developments while being more comfortable with organic ones where it gets to play to its strengths.
These areas, he pointed out includes heavy maintenance, such as re-deliveries, line, and integrated (tip-to-tail) maintenance, cabin interiors, aircraft finishing, and avionics.
“We are also gearing ourselves to address the significant opportunities that are coming up in both domestic and regional end-of-lease or redelivery markets, given that nearly 70% of the commercial aircraft market operates on the SLB (sale-lease-back) concept and over 65% of the new aircraft deliveries are expected to happen in the APAC region, including India,” he said.
The group, established in 1951, is the country’s largest, privately owned, integrated provider of aviation services to scheduled airlines, organisations, and individuals owning or operating aircraft, as well as to defence services and institutions.
According to Bhaskar, after expanding the group’s presence in Nepal last year, the MRO major now plans to expand overseas, especially in the SAARC region.
“We will remain integrated with our customers’ needs and our ability to offer value to them. From a near-term perspective, we remain confident of complementing our success in Nepal with other comparable opportunities,” he said.
In terms of the domestic market, Air Works has expanded its capabilities by more than 40% during the COVID period by setting up base maintenance facilities at the Cochin International Airport and Hosur for greater diversification and customer flexibility, he said, adding that customers have responded positively to our multi-base strategy and Kochi is receiving increasing traction from regional (APAC and the Middle East) carriers.
On India’s prospects of attracting global MRO business, he cited that hubs such as Singapore have been created over several years with a friendly tax and duty ecosystem.
At present, nearly 80% of all MRO-related services in value terms are sourced by domestic airlines from international hubs like Dubai in the Middle East and Singapore, the Philippines, and Hong Kong in the Far East.
Tax breaks and lower duty on spare parts in these countries make MRO services much cheaper than in India.
Bhaskar said that MRO is a specialised, high-capex (capital expenditure)-driven business with investment funds required for acquiring land, infrastructure, maintenance capabilities, OEM approvals, tooling, skilling, and certifying manpower.
Setting up a greenfield MRO could require an investment of upwards of Rs 750 crore.