Air Works India set to close two aircraft maintenance deals

Air Works India Engineering Pvt Ltd has accelerated its organic growth even as it is scouting for an engine overhaul company in Europe and Middle East.

The aviation services company is on the verge of closing deals with two airlines in the South Asia and the Middle East for the maintenance and repair of A320 and Boeing 737 aircrafts.

Vivek N Gour, the newly appointed chief executive officer (CEO) of Air Works, said the contracts have been finalised, it was now only a matter of closing the deal.

Owing to the confidentiality clause in the deal, Gour did not reveal the names of the companies.

“Our deal with the South Asian airline initially involves a fleet of four-six A320 and in the Middle East we would be doing the maintenance and repair of Boeing 737,” he said.

Besides these, the aircraft maintenance, repair and overhaul (MRO) company is pursuing other deals for which it has put in bids and is expecting to win them on competitive pricing.

Gour stressed Air Works would be competing on quality for MRO bids despite the natural cost advantage it has due to being located in India.

“Our cost is marginally lower than other MROs in the region - Singapore, Malaysia, Hong Kong, Middle East and China - but we are competing on quality and timeliness,” he said.

Meanwhile, the company is also on a lookout for an engine overhaul firm to add that piece of service in its MRO offering. The size of the acquisition could be between $25 million and $100 million depending all what it offers in terms of skills and markets.

“Right now this capability (engine overhaul) doesn’t exist outside of Air India and military in India. We are in active discussion with some of the engine manufacturers whether we can do it together,” said Gour.

He said the company was not completely depending on acquisition to launch its engine overhaul service. 

“We are looking at both options -acquisition or setting it up ourselves. We may have another hangar, which could either be in Hosur, Bangalore or in a special economic zone (SEZ). Locating our second hangar in a SEZ would give us the benefit of waiver of custom duty on imported aircraft spares and components, which is currently very high,” said Gour.

Currently, there exists immense untapped MRO opportunity in India with over $500-600 million of work is being done outside India.

“Only 10% of this ($500-600 million MRO work) is being carried out in India. The remaining 90% can also be done in India if we create adequate facility for it,” said Air Works executive director Ravi Menon.