MRO to come up near B'lore

An aircraft maintenance, repairs and overhaul (MRO) facility is being set up by a consortium led by Bangalore-based Auk Aviation near Bangalore, with GMF AeroAsia as its strategic partner.

Speaking to Business Standard, Jitendra Bhatia, managing director, Auk Aviation, said GMF AeroAsia (Garuda Maintenance Facility AeroAsia) is a large MRO and belongs to the Indonesian government. "GMF already has a client base from India with airlines such as SpiceJet sending their aircraft for maintenance at this unit in Indonesia," he added.

Bhatia has 10 years of experience in aerospace, having been with HAL. He also has five years of experience in the sector and another 10 years in infrastructure. The facility will come up in four phases, which will see an investment of around $40 million in the first two phases. The amount will be raised through debt and equity.

About 65 per cent of the MRO work in the country is outsourced today and a major part of the Indian aviation industry depends on Southeast Asia for servicing their aircraft.

The MRO will focus on providing services to Airbus A320 and Boeing 737 families of aircraft. These aircraft account for about 65 per cent of all aircraft currently operating in the country. Auk is set to lease land near Bangalore for its facility. The facility will have hangers and parking aprons among others.

Auk will provide airframe maintenance, components and accessories repair and technical support as part of its initial service offerings. It plans to progressively expand its capabilities to cover heavy maintenance and modifications.

The investments would be spread in two phases. In the first phase, Auk plans to set up facilities for conducting technical services audits, internal maintenance-related audits, audit suppliers and sub-contractors, re-evaluate the present practices, maintenance planning services, engineering services, quality systems, logistic and material services, and maintenance service support up to C-checks. C-checks are performed approximately every 12-18 months. This maintenance check puts the aircraft out of service and requires plenty of space "" usually at a hangar at a maintenance base.

In the second phase, it plans to offer maintenance planning services, engineering services, quality systems, logistic and material services, maintenance support up to D-checks, corrosion prevention and control programme, major structural repair and modifications, components and accessories repair, engine maintenance and aircraft interiors.

D-check is done every 4-5 years. This is the check where the entire airplane is taken apart for inspection. This requires even more space and time than all other checks.

"To enhance the probability of success in the highly-competitive Indian market and reduce the incubation period before the business becomes profitable, Auk is close to tying up with a private domestic airline for total maintenance support," added Bhatia.

A strategic alliance of this sort will guarantee a steady stream of revenues in the initial years and will thus greatly reduce the effect of financial uncertainties due to market forces.

Auk's decision to set up an MRO comes at a time when a clutch of global majors along with Indian partners are all rushing in to cash in on the aircraft maintenance boom in India. And logically so.

"The price of $40 per manhour in India is about 60 per cent cheaper than the prices offered by the MROs in Southeast Asia," said Anil Kumar, a research associate with Zinnov, a research and consulting firm.