Air Works bets high on growth in Indian aviation

Will look to double revenue in five years, aim for a public listing in 2020

On 16 May, VT-SLB, a Boeing 737-800 of SpiceJet completed its routine heavy maintenance at the Hosur facility of Air Works. It was the 200th aircraft that the maintenance, repair and overhaul (MRO) firm had completed after it got approval from the regulator in 2008. But MD Vivek Gour aims higher and says that while it took the firm 8 years to reach 200, it will take only 15 months for it get its 300th order. “In 15 months, I am convinced that we will complete 100 more checks, my hands are full and we are expanding facility and recruiting more,” Gour told in an interview.
 

Gour says he is betting high on the government’s regional connectivity scheme which he believes will facilitate the entry of smaller planes in Indian skies. “These planes will not fly to Singapore, Malaysia or Dubai, hence I believe with the smaller planes, there is a great opportunity for Indian MRO firms,” Gour says.
 

Air Works has the facility to do heavy maintenance check for the ATR-42, ATR-72 and Bombardier Q-400, the most common type of regional aircraft used by Indian airlines. “We are the best positioned to take benefit of that. We have excellent credentials; we do airframe maintenance, line maintenance for many of them. Spice and Jet are already our client, IndiGo is a potential customer. Most importantly there will be many new players in the regional sectors,” Gaur says.
 

Under the regional connectivity scheme called UDAN, the government aims to lure airline operators to fly on less profitable regional routes by subsidising them. While SpiceJet and Alliance Air have participated in the first bidding round, market leader IndiGo has recently placed an order for 50 ATR-72 to foray into regional aviation space.
 

Simultaneously Gaur is buoyed by the huge order book of Indian carriers which he believes will give a prop to the business. “We count Vistara, AirAsia among A320 operators as our client, with SpiceJet which operates B737 it has been a strong relationship, with new aircraft coming in I can only see the business growing,” he says. According to aviation consultancy firm CAPA, Indian airlines order book will reach 1080 aircraft, the third largest in the world after the US and China.
 

Air Works is in the process of building a new hangar which will increase its capacity from the range of servicing four narrow body aircraft at the same time to seven narrowbody aircraft. “That’s like a 75 per cent growth,” Gour says.
 

Founded in 1951 by PS Menon and BG Menon, the company has grown through acquisitions since Gour’s appointment as the head of its business in 2010.
 

With business growing, the company’s early stage investors like Punj Loyd and GTI capital are looking to cash out profitably. “If they find suitable investor, they will like to cash out but they can only sell when there is someone to buy,” Gour says. But the company will not look for a public listing before 2020. “ At present my revenue is around Rs 700 crore, I want o focus on an organic growth now and look to double revenue in five years,” he says.