Air India Engineering Services eyes Rs 200 cr revenues next fiscal

Currently, revenues are around Rs 130 crore and a jump would also help Air India -- which has turned operationally profitable after a decade -- improve its overall financials.

By: PTI | Nagpur | Published:November 3, 2016 7:33 pm
air india, air india engineering, air india news, air india revenue, air india finances, india news,business news Photo for representational purpose.

Pinning hopes on getting more work orders from private airlines and increased capacity, Air India Engineering Services Ltd (AIESL) expects to rake in Rs 200 crore revenues in the next financial year.

A wholly-owned subsidiary of national carrier Air India, AIESL is working aggressively to expand its foot print in the high-growth potential Maintenance, Repair and Overhaul (MRO) segment as most of the private airlines carry out these works overseas.

“We are looking to mop up revenue to the tune of Rs 200 crore from third party business in the next fiscal,” Air India Chairman and Managing Director Ashwani Lohani said here.

Currently, revenues are around Rs 130 crore and a jump would also help Air India — which has turned operationally profitable after a decade — improve its overall financials.

Speaking to reporters at AIESL’s Nagpur MRO facility, he said there is additional capacity here which the firm wants to utilise for aircraft maintenance work of private airlines.

The Nagpur facility today started carrying out up to 4A checks on A320 aircraft, manufactured by Airbus.

“So far we were doing mainteanance work on B777 only. After getting the mandatory approvals from the Directorate General of Civil Aviation (DGCA), we have now started carrying out up to 4A checks on A32O aircraft as well,” Lohani said.

So far, Air India and aircraft maker Boeing have invested around USD 116 million in the Nagpur facility, which started functioning in August last year. So far, Boeing has put in USD 107 million, while the national carrier has pumped in USD 9 million.

At current exchange rate, USD 116 million translates to more than Rs 770 crore.

Recently, AIESL inked a Memorandum of Understanding (MoU) with no-frills carrier SpiceJet for maintaining the latter’s Boeing 737 fleet.

According to Lohani, AIESL is negotiating with GoAir to maintain its A32O fleet at the facility here.

“AIESL expects to start testing and minor maintenance work of GE engines by January next year,” he noted, adding that such works would be done at an exclusive workshop which is being set up for these engines at the facility.

Currently, AIESL provides line maintenance support to around 30 domestic and overseas airlines at various stations.

Last month, AIESL joined hands with Tribhuvan Technologies for a strategic partnership to tap opportunities in the defence MRO segment.

As there are not many 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 first in a decade, Air India has reported an operating profit of Rs 105 crore in 2015-16 on the back of lower fuel costs and higher passenger numbers. It had an operating loss of Rs 2,636 crore in 2014-15.