GMR to assemble planes next

GMR Hyderabad International Airport Ltd (GHIAL) is setting up an aircraft manufacturing unit near the international terminal that it operates near the city, in a joint venture with an unnamed European major.

“We are talking to an European company, which is a leading aircraft manufacturer. We are hopeful of signing an agreement in the next 1-2 months,” Ravindran Devagunam, COO, of the aviation and aerospace business of the GHIAL, told DNA on Thursday.

The manufacturing activity would be confined to smaller aircraft initially. “We are looking assembling these small aircraft first,” Devagunam said.

GHIAL is setting up an aerospace special economic zone across 250 acres at the sprawling 5,500-acre airport complex.

In fact, the European company is working on this deal as part of its
offset obligation for defence contracts bagged in India.

The GMR group is planning to convert this aircraft major into an anchor client at the manufacturing hub at the SEZ.

“We are talking to one more aircraft company. But, the European company would be the first to come and hopefully it would be the first with which we would be signing a deal,” he said.

The investments and size of the activity are yet to be determined.
In fact, the SEZ is one of the plans GMR has to monetise the property it has at the international airport.

The company is also at an advanced stage of setting up a maintenance, repair and overhaul (MRO) facility at the airport. The company has formed a joint venture for the MRO with a Malaysian partner and Jet Airways too has picked up stake in the joint venture.

“Jet will immediately start using the MRO. In addition, we have also almost sealed a deal with SpiceJet. This company is currently flying its aircraft to Malaysia for maintenance. Once the MRO at Hyderabad is ready, SpiceJet will start using the facility.

Though we have two immediate clients to make use of the MRO, we are talking to several more airlines and we would be able to get significant capacity utilisation once it is up and running,” Devagunam said.

The MRO facility, which is likely to be the first among the SEZ-based facilities to become operational, would start its operations in the first quarter of the next financial year.

Additionally, GHIAL is also in the process of setting up a logistics hub at the SEZ. The logistics hub would primarily support the aircraft maintenance functions.

“Currently, it is taking 24 to 48 hours for certain spares to become available to the airlines during the maintenance of their fleet. The logistics hub would focus on reducing the time to two to three hours. We are currently talking to several component suppliers. Once the plans are finalised, the facility would support the upcoming MRO,” Devagunam said.

Though in phases, the SEZ is expected to start providing revenues to the company, with all its constituents in place, by 2012-13.