Aircraft servicing, maintenance in demand even as industry slows

Mumbai: Investments are flowing into the business of aircraft servicing even as the Indian aviation industry struggles with slowing passenger traffic and mounting losses in the face of an economic downturn.
US plane maker BoeingCo.last week leased 50 acres of land at a special economic zone (SEZ) in Nagpur, Maharashtra, to build a maintenance, repair and overhaul (MRO) facility in association with the National Aviation Co. of India Ltd(Nacil) that runs Air India. SEZs are self-reliant enclaves that offer tax holidays.
Mumbai-based Duke Aviation Engineering Pvt. Ltdalso acquired 36.5 acres on 31 January in the same SEZ of Maharashtra Airport Development Co. Ltd(MADC) where it will spend $150 million (Rs735 crore) to set up an MRO facility. The company expects to start construction in March and be operational by February next year. MADC is also likely to pick up a small stake in Duke Aviation.
Air Works India Engineering Pvt. Ltd, a firm in which engineering company Punj Lloyd Ltdand US-based private equity firm Global Technology Investment Group hold a 33% stake each, has started constructing an aircraft maintenance facility at Hosur, Tamil Nadu, in November.
“India is expected to emerge as the fastest growing MRO market over the next 10 years. MRO spending is estimated to rise from merely $440 million in calendar year 2007 to $1.2 billion in 2017, exhibiting a CAGR (compounded annual growth rate) of 11.8%,” says a September 2008 report by audit and consultancy firm Ernst and Young India Pvt. Ltd .
“Further, the Indian MRO industry is expected to have the potential to service a fleet of 1,000 commercial and 500 general aviation aircraft by 2020,” the report, authored by Kuljith Singh, partner, and Asha Katyal, associate director at E&Y, added.
02/02/09 P.R. Sanjai/Livemint

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Categories: Indian Aviation- In General Feb 2009