Air India’s MRO: Traffic, tax incentives imperative for Nagpur facility to take off

In the new Civil Aviation Policy, the Centre laid down its aim for developing India as an MRO hub for aircraft. “The MRO business of Indian carriers is at around Rs 5,000 crore, 90 per cent of which is currently spent outside India — in Sri Lanka, Singapore, Malaysia, UAE, etc. Given our technology and skill base, the government is keen to develop India as an MRO hub in Asia, attracting business from foreign airlines,” the policy document, which was released last year, noted.

Since the first aircraft checked in at the facility in May 2015, AIESL has done maintenance works on 21 planes so far, including the recently concluded ‘C-check’ on SpiceJet’s Boeing 737. A senior AIESL official posted at the Nagpur MRO said that the firm entered into an MoU with SpiceJet in 2016 for maintenance of the airline’s aircraft for three years, post which AIESL got the necessary tools and manpower in place to get an approval from the Directorate General of Civil Aviation (DGCA) for servicing of the single-aisle Boeing 737.

Even as Boeing had built the facility for Air India as part of its commitment to set up an MRO when the flag-carrier placed an order for 68 aircraft with the US firm, independently operating the facility on which only Boeing aircraft could be serviced made less commercial sense for AIESL, the official said, considering the majority chunk of Indian skies have Airbus A320 aircraft, a direct competitor to the 737 model. Air India alone has 65 Airbus narrow bodies in its fleet, including the shorter A319s and the longer A321s. India’s largest airline IndiGo has 136 A320 aircraft in its fleet. Apart from these two airlines, other domestic carriers Vistara, and AirAsia India also fly the French manufacturer’s products.

Another senior Air India official, on condition of anonymity, said that it would be imperative for the Nagpur facility to generate revenues to the tune of Rs 500-600 crore per annum to become profitable.

“We have DGCA approval to carry out less complex 4A checks including modification, structural inspection and repaid on A319, A320 and A321 series aircraft fitted with certain types of engines, and will be looking to seek approval for more extensive checks once we have a customer on board. We’re also planning to soon seek DGCA clearance for Boeing 737’s full maintenance planning document. Once we have the approval, we would be able to conduct any kind of checks on that aircraft model,” said SS Quazi, general manager (engineering) and chief maintenance manager of AIESL’s Nagpur MRO.

On the other hand, while SpiceJet’s chairman and managing director Ajay Singh claimed that the airline was saving time and money by getting its aircraft serviced at the Nagpur MRO, it is important to note that SpiceJet does not have Nagpur on its route map. This means that to honour its agreement with AIESL, the low-cost carrier has to especially fly to Nagpur for its base maintenance. While this could result in airlines like SpiceJet with limited, or no connectivity to the “orange-city” going ahead, this could also be a hindrance for other private airlines to use AIESL’s facilities.

At an event on Sunday here, Minister of Road Transport and Highways Nitin Gadkari and Maharashtra Chief Minister Devendra Fadnavis both urged Singh to set up a cargo and passenger hub at Nagpur to ensure SpiceJet’s maintenance operations are viable. Other major MRO facilities in the country located in Mumbai and Hyderabad, operated by Air Works and GMR, respectively are located adjacent to the airport to ensure that logistical issues are not faced by airplanes under service.