Jet may buy stake in MRO facility at Hyderabad airport

Mumbai: The country’s largest private carrier Jet Airways is looking at buying a stake in the maintenance, repair and overhaul (MRO) facility at the new Hyderabad international airport, according to a source close to the development.
A senior Jet Airways official declined to comment on the ongoing negotiations, but agreed there was a proposal to buy a stake in the MRO facility. No further details are available at this stage.
German carrier Lufthansa pulled out of a joint venture with Hyderabad International Airport. The airport, nevertheless, has signed an agreement with Malaysian Airlines. The MRO centre is promoted by the GMR group, which also operates the airport. It will handle all types of aircraft, including the A380s.
Jet is considering the stake buy at a time when airlines spend as much as $100 million towards maintenance expenses. Moreover, it has narrow and wide body aircraft, which are sent to overseas MRO providers for maintenance. It makes sense for Jet to pick up a stake in the MRO facility and thereby reduce maintenance costs, said an analyst with domestic brokerage firm.
Jet Airways operates a fleet of 85 aircraft, sourced from Boeing and Airbus, as well as turboprops. Its wholly owned subsidiary JetLite has a fleet of 24 aircraft, including 17 Boeing 737 series and seven Canadian Regional Jets 200 Series.
The shares of Jet Airways ended at Rs 178.65 on Monday, down 4.36%, on the BSE. Aircraft were traditionally sent to MRO providers overseas for maintenance purposes. Most airlines outsource maintenance. GoAir, for instance, opted for MRO services provided by Air France Engineering for its aircraft. Indian aviation companies are now starting their own MRO facilities to save costs.
23/12/08 Mithun Roy/Economic Times

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Categories: Airports Dec 2008, Jet Airways Dec 2008