EADS-Jupiter MRO on backburner

European aerospace and defence group EADS’ plans to set up a maintenance, repair and overhaul (MRO) facility along with Rajeev Chandrasekhar’s Jupiter Aviation in Karnataka is stuck in a limbo with the project not making commercial sense in today’s market scenario, said a senior executive with Airbus Engineering Centre India Pvt Ltd, who did not want to be named. 

“We do not want to start something, which does not make commercial sense. They (Jupiter) have some land but it (the MRO plan) is in a limbo because we do not want to go ahead with it looking at scenario in the market,” he said.

The executive also said with airlines like Jet Airways, Kingfisher Airlines and Air India having up their own captive MROs there was very little scope for MRO ventures like them.

“Today, Indian airlines have an overall fleet of little over 200 aircraft and as many Indian carriers already have their captive facilities, there is very little business scope for MRO firms,” he said.

Seattle-based Boeing has also pushed back its plans to set up an MRO facility in Nagpur beyond 2011.   

The US aerospace company was to begin work on the greenfield MRO for Boeing 787s and 777s type aircraft in the third quarter of this calendar year.

Another MRO venture that has failed to take off was Lufthansa Technik’s. The German company, which is technical service provider for commercial aircraft, had tied up with GMR Hyderabad International Airport (GHIAL) for the project.

GHIAL has now roped in Malaysia Airlines for an MRO facility in Hyderabad. 

According to sources in Jupiter Aviation, the Karnataka government has already allotted around 900 acres of land in Hassan to the company for its aviation venture that includes building MRO, setting up pilot training school, airline charter operations and an international airport. 

“The 900 acres that has been given is not enough. The company had asked for 4,000 acres but the government is not ready to give anymore land. Meanwhile, the whole project has become unviable because it requires colossal investment while there is no certainty on returns because of the aviation sector passing through a rough patch,” the Jupiter executive said.

An aviation analyst said EADS should have partnered with airline operator instead of a non-aviation player as that would have brought in captive business.

“Jupiter was a wrong choice as Rajeev Chandrasekhar did not bring in anything other than political strength. Had EADS partnered with an airline like Jet or Kingfisher, they could have got captive business. For funds, they should have got a financial institution,” he said. Currently, AirWorks is the only Indian MRO that is operational while airlines have their own MROs.