1. MRO - INDIA : Challenges
Ashwani Sharma
Quality Manager – Air India Express
Ashwani Sharma
Quality Manager – AI Express

2. Hurdles being faced by Existing and prospective MRO operators.
MRO - India
Hurdles being faced by Existing and prospective MRO operators.
Ashwani Sharma
Quality Manager – AI Express

3. Quality Manager – AI Express
MRO – Opportunities started in 2005 at Paris Air Show
Between 2005 and 2007, Airlines operating in India stunned the world of aviation by placing orders for hundreds of aircraft worth Billions of dollars.
Analysts were surprised by the sheer audacity of new start up carriers placing large orders (100s of aircraft).
Ashwani Sharma
Quality Manager – AI Express

4. Quality Manager – AI Express
Airline
Orders*
Value USD
AIR INDIA (AI, IC, AICL, Alliance)
111 (27 B B B A320 Family)
11.0
Kingfisher
50 (20 A A A A350XWB)
10.0
INDIGO
100 A320
8.0
GO Air 10
1.0
Jet Airways
66 (18 A B B B787)
Spice Jet
20 B737
2.0
TOTAL
357
42.0 BILLION
Ashwani Sharma
Quality Manager – AI Express

5. Quality Manager – AI Express
Sensing the tremendous opportunity. Many established players scrambled to set up shop to make huge profits that beckoned enticingly.
Air India – Nagpur
Air India – New Delhi
Lufthansa Tecknik – Hyderabad
Jet Airways, Paramount, etc
Ashwani Sharma
Quality Manager – AI Express

6. Quality Manager – AI Express
MRO – India
Analysts predicted that starting with a modest USD 250 Million, the Indian MRO market was set for an exponential growth as below :
USD $1.17 billion in 2010
USD $2.60 billion by 2020
-Frost & Sullivan
Source Aeronautical Soceity of India
Ashwani Sharma
Quality Manager – AI Express

7. Quality Manager – AI Express
MRO – India
The global MRO market was estimated to be worth between $25 billion to $30 billion a year . Inventory in the airline industry’s supply chain was projected to be excess of $50 billion. (Source : FAA Report 2003)
Ashwani Sharma
Quality Manager – AI Express

8. Quality Manager – AI Express
MRO – India
One of the major factors that influenced the decision of established players to set up MROs in India was, of course, abundant supply of highly skilled, English language proficient and eminently competitive manpower.
Ashwani Sharma
Quality Manager – AI Express

9. Quality Manager – AI Express
PRESENT STATUS
Of the dozen odd prospective MRO projects only 3-4 have materialized as below
AIR INDIA – Boeing at Nagpur
GMR – MAS at Hyderabad
CIAL at Kochi
AIR WORKS at Hosur
Ashwani Sharma
Quality Manager – AI Express

10. Quality Manager – AI Express
As a result of these large a/c orders placed in , commercial scheduled airline fleet size was to treble from in 2005 to approx in 2011.
By a conservative estimate, approximately 500 narrow body aircraft would clock close to 2 million hours annually resulting in 200 ‘C’ checks per year.
NOTE : Data does not include ATRs.
Ashwani Sharma
Quality Manager – AI Express

11. %age of ‘C’ checks done at MROs outside India.
Presently almost 60 % of all ‘C’ checks on narrow body fleet are being outsourced to MROs located outside India.
Only two of the five big operators have in-house capability to accomplish ‘C’ checks.
NOTE : Data does not include ATRs.
Ashwani Sharma
Quality Manager – AI Express

12. Flight of Foreign Exchange Estimated cost of ‘C’ check = USD100,000
Total outgo for 160 ‘C’ checks outsourced would be an astronomical sum of USD 16 Million per annum.
Ashwani Sharma
Quality Manager – AI Express

13. Quality Manager – AI Express
MRO – Challenges
Government Issues – Taxation problem
Lack of space – Prohibitive cost - Metro Airports
Lack of Infrastructure – Non-metro Airports
Vendor absence from India
Regulatory Issues
Ashwani Sharma
Quality Manager – AI Express

14. Quality Manager – AI Express
MRO – Challenges
Government issues –
Service tax
Customs duty
Value Added Tax
Taxes and other duties would escalate the cost of a ‘C’ check by 43%
Ashwani Sharma
Quality Manager – AI Express

15. Quality Manager – AI Express
MRO – Challenges
Metro Airports
Property Issues – Scarce land
High aircraft handling charges
Highest landing fees
Proposed ATR shifted from Nagpur to Singapore
Ashwani Sharma
Quality Manager – AI Express

16. Quality Manager – AI Express
MRO – Challenges
Non – Metro Airports
Lack of Infrastructure
No direct flights from USA or Europe
Ashwani Sharma
Quality Manager – AI Express

17. Quality Manager – AI Express
MRO – Challenges
VENDORS - OEM – Back Shop Support
Negligible Vendor or OEM presence in India
Increased cost of spare part acquisition
High probability of time penalties while undertaking contract work
Ashwani Sharma
Quality Manager – AI Express

18. Quality Manager – AI Express
MRO – Challenges
Regulatory Issues
FAA /EASA DAR/DER’s or their DGCA equivalent not available India
Probable logistic challenge
Information flow hurdle
Ashwani Sharma
Quality Manager – AI Express

19. Quality Manager – AI Express
MRO – Challenges
Infrastructure
Lack of specialised infrastructure
(Eg : Dedicated painting hangars, L/G Retraction Check Bays etc.)
Cost / Turn-around time overruns
Reduction in capability scope
Ashwani Sharma
Quality Manager – AI Express

20. Quality Manager – AI Express
MRO – Challenges
Infrastructure
Congestion of space in Front line airports
Lack of proper infrastructure in secondary airports
Increase in cost
Ashwani Sharma
Quality Manager – AI Express

21. Quality Manager – AI Express
MRO – Challenges
Competition
Many players entering the market
Many short term challenges while setting up facilities
Ashwani Sharma
Quality Manager – AI Express

22. Quality Manager – AI Express
MRO – Challenges
Competition - OPPORTUNITY
Many players will stimulate growth
Increased chances of synergy
Healthy competition will energise the market
Ashwani Sharma
Quality Manager – AI Express

23. Quality Manager – AI Express
THANK YOU – QUESTIONS?
Ashwani Sharma
Quality Manager – AI Express