Firm works on expansion despite the sector failing to show signs of revival.
AirWorks, a Mumbai-based MRO (maintenance, repair & overhaul) company, plans to invest up to Rs 180 crore to expand and will look at raising funds through equity or debt in the near future. The company is raising resources for building an additional hangar, a dedicated paint operation and for future engine/component MRO activities.
AirWorks, which is hoping to report revenues of Rs 100 crore by the end of this fiscal, has a commercial MRO in Hosur with one hangar capable of housing two ATR 72-size aircraft or one narrow-body aircraft (Boeing 737). It has eight service centres in India and plans to build one more wide-body hangar by the end of 2010.
AirWorks, owned by the Menon family in Mumbai, had raised Rs 100 crore from Punj Lloyd and US-PE fund Global Technology Investment in late 2007.
The 58-year-old independent aviation MRO firm recently secured the European Aviation Safety Agency (EASA) certification for its Hosur unit, based on which it hopes to draw more global customers. It has been marketing its services abroad, focussing in a big way on West Asia and neighbouring Asia countries. Till now, AirWorks was constrained by lack of certification from abroad and so was unable to attract business from outside, said Chief Executive Fredrik Groth.
AirWorks, along with four-five other MROs in the country, are in a market that is estimated to be around $250 million and services mostly business jets and helicopters. Many of these are being routed to South East Asia or West Asia. The market that AirWorks is looking to tap is airlines, said to be worth over $350 million. Most of this business goes abroad to facilities that have EASA or FAA certification.
AirWorks’ intent to expand comes despite the MRO industry’s present state of hibernation, with many projects announced over the past two years being put on the backburner. This was after the general aviation sector was hit by the economic slowdown along with the rest of the world.
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According to Raajeev Batra, head of transport advisory, KPMG, the aviation industry in India, which was growing 25-26 per cent two years ago, is growing only 3-4 per cent.
Many MRO projects were announced in the last two years. Air India had announced plans to expand its portfolio by building an MRO unit for narrow-body aircraft with Airbus Industrie/Indian Aero venture apart from setting up a GENX/GE90 engine repair facility in association with General Electric.
In late 2007, King Fisher-Air Deccan was reported to have joined hands with Gulf Aircraft Maintenance to set up an MRO for over Rs 200 crore, but nothing moved on that front. Boeing had also announced a plan to set up an MRO in India.
Most MRO projects announced in 2007-08 by large global players like Lufthansa, EADS and Boeing involved major domestic airlines as local partners. However, when the airlines began to suffer growing losses, most preferred to focus on their core business.
AirWorks has 80 aircraft under management, including 30 helicopters and 50 fixed-wing aircraft belonging to private companies, individuals and air taxi operators. It is also into aircraft sales, charters, consulting, finance and insurance.