Aviation MRO sector in India likely to draw large foreign investments

The aircraft maintenance, repair and overhaul (MRO) business is all set to gain momentum in a big way in India. A report by Ernst & Young says the MRO category in the aviation sector can absorb up to $120 billion worth of investments by 2020. Investments by various overseas companies are in the pipeline.

Boeing has said it will invest $100 million to set up an MRO facility in India, in cooperation with Air India and a private partner. (See: Boeing to invest $185 million in joint venture MRO facility with Air India) Boeing has already tied up with national carrier, Air India for this venture. The name of the third partner will be formally announced by December, said Boeing senior vice-president (sales) and president (aircraft trading) Dinesh Keskar.

Mumbai-based low-cost airline GoAir has already formed a joint venture with the Singapore-based SIA Engineering to establish an engineering facility in India. But no investment figures have been announced yet.

European aircraft manufacturer Airbus has said it is likely to set up an MRO service in the country by early next year.

The Kingfisher Airlines-Air Deccan combo is also looking at opportunities in the MRO sector in a joint-venture partnership with a third party, preferably a foreign provider.

The new company would probably be around one-third owned by each of the partners and the foreign provider would manage the operation, an Air Deccan representative said.

The Centre for Asia Pacific Aviation (CAPA) says there are significant investment opportunities in the MRO sector in India. It has estimated that the country has the potential to service a fleet of 1,000 commercial and 500 general aviation aircraft.