| With its commercial aircraft fleet set to double in size within ten years, India has a bright future ahead of it in the maintenance sector. But while India remains a complex market for the country's different operators, this is even more the case for MRO. Over 90% of maintenance for the Indian fleet is carried out abroad, mainly in South East Asia (especially Singapore) and the Middle East. We have to say that there are good reasons for this, with an unfavourable tax system, meaning that the maintenance sector is still one for the future.
The MRO market in India has traditionally been driven by the needs of the public airlines Air India and Indian Airlines, which have now merged. Air India Engineering Service Limited (AIESL) is still far and away the biggest player on the market, with its six main base maintenance centres spread around the country (Mumbai, Kolkata, Delhi, Hyderabad, Nagpur and Thiruvananthapuram).
And yet things have started to move over the last few months, for example with the FAA approval landed in May by GMR Aero Technic for its Hyderabad maintenance centre for Boeing 737NG and Airbus A320 aircraft. In the same way, slightly early in the year, the AAR joined forces with Indamer Aviation to create a new maintenance centre in Nagpur as a Joint Venture. This centre, which is now in construction, will have 6 bays for single-aisle aircraft (including one painting bay), with the possibility of extending it to 16 bays and to component repair shops. This centre will be DGCA, FAA and EASA certified.
Even AIESL, which until now had been completely devoted to meeting the requirements of Air India and its subsidiaries, is developing and now wants to attract operators from Asia and the Middle East. With this in mind, the Air India MRO division invested abroad recently to propose line maintenance services at different airports in the Gulf region (Manama, Muscat, etc.).
According to a study from Oliver Wyman which was presented at MRO Asia-Pacific; the Indian airline fleet will increase from 511 aircraft in 2018 to 1175 in 2028 (up an average of 8.7% each year, around the same as China). This growth will of course be driven by the arrival of numerous single-aisle aircraft (+5.7% per year). The MRO expenditure generated will rise on average 5.6% per year over the same period to reach 3 billion dollars in 2028 (including line maintenance).
We can see therefore that India has major growth potential, not forgetting that the country currently has the lowest labour costs of all regions around the world, with an average salary estimated at 43 dollars per hour for airframe maintenance work, while there is a host of highly-qualified personnel available.
This is also why the Indian government has made the MRO sector a priority development area over these last few years, making it an integral part of the "Make in India" initiative. Logically, India wants to encourage foreign investment (IDF at 100% for the MRO sector, zero VAT rate, tax-free measures to simplify spare parts use, zero taxation on the import of maintenance tools and so on). In particular, the goal is to attract a certain number of strategic equipment providers, like what has happened in South East Asia or China over the last few years. There's no doubt that India will manage to create a new global maintenance hub. The only unknown factor, and it's not a minor one, is when?