Crisis-hit airlines take MRO route for additional revenues

With mainstream revenues slipping due to the global economic recession, airlines are trying to get a piece of the $600 billion (Dh2.20 trillion) maintenance, repair and overhaul (MRO) market by offering services to third parties.
Players such as Lufthansa, Air India and Malaysian Airlines, to name a few, are eyeing opportunities in the Middle East market. Indian aircraft operators are eyeing the huge market of the Middle East with the objective of maximising revenues using existing infrastructure and facilities.
Major operators and medium players, too, are entering into this arena. For instance, Air India and another company, Air Works - a small player - are entering the Middle East market.
Air Works has formed a joint venture with the UK-based Air Livery and the JV will take up aircraft exterior maintenance including painting and refinishing.
"It's a 50:50 JV with Air Works and we take up painting works for aircraft. We expect about £10m (Dh 61.04m) revenues in the first year of operations," Tracy Jarman, Director at Air Livery, said.
Air India has entered into an agreement with Sharjah-based Aerostar Asset Management, which will market Air India's MRO services in the Middle East market.
"We offer MRO services to third parties as we have a huge talent pool and infrastructure. We have studied this market and found there's sizable demand. Air India will tap its resources to get into this business," Jitender Bhargava, Executive Director for Corporate Communications at Air India (National Aviation Company of India), told Emirates Business.
By 2028, the region's passenger fleet will almost treble to 1,681 from the 586 passenger aircraft recorded at the beginning of 2009. This growing number is attracting MRO players.
Air India has its overhaul facility in Mumbai. Air India Engine Overhaul Division and Aerostar have created an Engine MRO brand called The A Team for the Middle East market. Through this strategic alliance, Air India will provide MRO solutions to all operators in the region.
03/12/09 Emirates Business 24-7/Zawya

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Categories: Foreign Dec 2009, Indian Aviation- In General Dec 2009