The Indian aviation market is growing at around 18 per cent annually, and the civil aviation ministry is expected to actively pursue foreign investment in maintenance, repair and operations (MRO).
Large deals and joint ventures with global aviation majors may be expected soon. India could soon emerge the civil aviation MRO hub for Asia-Pacific.
The entire Asia-Pacific aircraft and engine MRO market was worth $8.71 billion in 2005, and is estimated to touch $12.90 billion by 2011. A number of foreign as well as Indian companies are looking to set up MROs in India.
In recent months, three different MRO joint ventures between Indian companies and foreign companies like Airbus, Boeing and SIA Engineering have been announced. The government will consider the allocation of land for hangars, reasonable and realistic lease rentals, long-term lease periods, and revoking royalty on aviation activities to encourage the creation of MRO facilities in the country.
Other proposals include outsourcing line maintenance by domestic and international airlines to MROs. Greenfield and modernisation projects of existing airports will also have provision for hangars and space for MROs.
Airlines need line maintenance for their aircraft. They also need heavy airframe and engine maintenance, as also component repair and overhaul facilities. Currently, only Indian Airlines and Air India have these maintenance facilities in-house. But, at times, even these airlines need to outsource their maintenance to foreign companies. There is only one third-party aircraft MRO facility in India.
Allocations for the booming civil aviation sector are expected to jump by a massive 303 per cent in the current Plan period. It will get Rs52,108 crore ($12.9 billion) against the Rs12,928 crore ($3.2 billion) sanctioned in the 10th Plan.
Projections suggest an annual 19 per cent increase in passenger traffic and an 11 per cent increase in cargo traffic during the 11th plan. The rise in funds for the sector will be to facilitate essential and substantial expansion of infrastructure for the improvement of airport capacity and passenger amenities.
The growth in traffic passing through Indian airports is estimated at 18.8 per cent a year, and the present traffic of 73.33 million should go up to 205.4 million by 2011-12. This will require a substantial augmentation in airport capacities and MRO facilities during the 11th Plan period.