AI's MRO business goes independent this year

Mumbai: As part of its on-and-off restructuring plans Air India is preparing to spin off its maintenance, repair and overhaul (MRO) division as a separate entity sometime in the current financial year. According to a senior AI official the MRO business has the capability to annually service 300 aircraft.

Arvind Jadhav, chairman and managing director of the airline, said, ''This is a very appropriate time. AI has a world-class testing laboratory, which is not marketed well. Once our MRO is hived off as a separate company, it will have the capabilities to service 300 aircraft every year.''

It is being given to understand that the civil aviation ministry is now engaged in preparing a Cabinet note seeking approval to convert the MRO division into a separate company.

Converting the MRO into a profit-making venture is a critical component of AI's turnaround plans, chalked out by the carrier in 2009. The carrier expects to post revenue of Rs3,000 crore annually from the MRO entity.

India is the ninth largest civil aviation market in the world.

The MRO market in India is estimated to be growing about 15% annually and several MRO companies, including those of Airbus and Boeing, Lufthansa Technik, Hindustan Aeronautics, Air Works India, Max Aerospace & Aviation and Hyderabad Aircraft Maintenance Company, are currently servicing the market.

According to industry experts, Indian carriers outsource MRO work of around $700 million to international companies every year which indicates a great need to develop MRO infrastructure in India.