Airline looking to form a company for it; hands over a Boeing 777-300 to Air India facility for major check and landing gear replacement
Jet Airways is looking to enter the domestic aircraft maintenance, repair and overhaul (MRO) market, estimated to be be $800 million in size.
"We are definitely thinking about it (MRO business) and may even form a separate company for it. It should make sense to us. We are keeping an eye on the situation and may take a call accordingly in future," K M Unni, chief operating officer, Jet Airways, said on Monday.
Air India Engineering Services Ltd (AIESL), the MRO arm of the national carrier, has announced Jet Airways as its has become the first major customer.
On Monday, Jet handed over a Boeing 777-300 ER to Air India Engineering Services Ltd (AIESL) for check at the latter's Mumbai facility.
The job, which is the first major check of a third-party aircraft for AIESL, includes 'C' check and landing gear replacement with an agreed turn around time of 30 days. A 'C' check is a major check of an aircraft that is conducted every three years and involves inspection of complete aircraft/engine systems and components and servicing.
H R Jagannath, CEO, AIESL, said the company has set a target of Rs 175 crore revenues in this year from outside work, and wants the revenue ratio from AI's and other airlines's planes to change from 80:20 at present to 60:40.
AIESL was hived off from Air India in 2013 as a separate subsidiary to revive the fortunes of the national carrier, which has been reeling under overe Rs 40,000 crore of debt. It received approval from aviation regulator Directorate General of Civil Aviation (DGCA) in January last year. Though the AIESL earns most of its revenues from servicing of India and its subsidiaries, it wants to now attract more of its business from other domestic airlines and foreign airlines which are within five hours of flying from India.
According to industry experts, the MRO industry has not grown in India due to taxation and policy hurdles. Most of the airlines from India service their planes in countries including Sri Lanka, Malaysia, Abu Dhabi, Hong Kong, Jordan, which is a costly affair.
"We expect more and more airlines to approach us once they see our turnaround time and quality of the work. Further, they would save a great deal on the expenditure by servicing it here rather than taking the plane to foreign country" said Jagannath of AIESL.
In an expansion bid, the company is urgently looking to hire about 150 engineers and 400 technicians as more planes are being deployed by domestic carriers in India.
According to International Air Transport Association (IATA), the association of 260 global airlines, the Indian domestic aviation market grew by 27.4% in March this year, making it the fastest-growing aviation market in the world.India's growth rate was over six times more than that of the US, which clocked the second-highest growth rate of 4.1%.
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