A report by Pw) and the CII says the country has the potential to be a global or regional maintenance, repair and overhaul destination.
A report by PricewaterhouseCoopers (PwC) and the Confederation of Indian Industry (CII) says the country has the potential to be a global or regional maintenance, repair and overhaul (MRO) destination.
Dinesh A Keskar president of Boeing India, who is heading the Seattle-based aerospace company’s MRO venture in India, says it is yet to be seen whether India would become a global hub. “I’m not sure whether India can become a global hub but we are quite comfortable with setting up an MRO here,” he said.
Ankur Bhatia, managing director of Bird group, shares Keskar’s view. He believes MRO facilities in the country will, at the most, convenience domestic carriers.
“There has been a gap in India for MRO facilities and mostly airlines tend to send their aircraft either to the US, Europe or Gulf destinations for the regular maintenance,” he told DNA.
Still, there are a host of other players — including Boeing and Bird group — setting up MROs in India over the coming years, such as Duke Aviation, EADS, Bravia Aviation and Max Aerospace and others.
So, what is driving them to tap opportunities in this segment? If you go by PwC’s study, it could be the potential of MRO revenues reaching $1.17 billion by 2010. The study indicates that the segment is growing 11%.
A recent report by Ernst and Young on the Indian aviation sector claims MRO spending in the country is estimated to rise from $440 million in 2007 to $1.2 billion in 2017, exhibiting an annual growth of 11.8%.
PwC believes India can become an MRO hub by capitalising on manpower arbitrage in India. MRO manpower costs range from $30-35 per hour. That’s almost 60% lower than the rates in West Europe or the US, though not significantly different from China or Indonesia.
Another factor in favour of India is the shortage of talent in developed countries. India has a robust supply of young talent.
India also has location advantage, according to the PwC report. “There are no MROs within a five-hour fly zone of India. India can leverage this advantage of being between Europe and Asia Pacific,” it says.
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