|
Aircraft maintenance has
$1-bn business potential in India
By
Neelam Mathews
Singapore,
Oct 22 (IANS) Indian aviation industry may be going through
turbulent weather, yet experts see a growing potential for
the maintenance, repair and overhaul (MRO) segment of the
industry, with projected revenue of $1.07 billion by 2013.
Many
companies, including Boeing in a tie-up with the state-run
Air India, have announced joint ventures in MRO business and
others are waiting in the wings for the government to address
some tax issues to jump into the market, the experts added.
Speaking
to IANS during an MRO Asia symposium here, C.S. Tomar, vice
president of engineering and maintenance for Kingfisher Airlines,
said the MRO market in the country was currently valued at
$405 million with a potential for $1.6 billion by 2018.
"It
makes economical sense for us to set up an MRO facility,"
Sitham Nadarajah, vice president for technical development
with Jet Airways, told IANS. "With volumes increasing,
we will be looking at D-checks for narrow bodied aircraft
like Boeing-737s."
The
D-checks are done on aircraft every four-five years, during
which the aircraft is completely stripped, checked and then
restored.
With
India's current fleet of 907 including helicopters, business
jets and 395 commercial aircraft, it makes a business case
for the MRO industry, the experts said, adding some issues
remained to make it a more viable proposition.
"To
many, India is still a black hole and yet to be understood,"
said Bharat Malkani, chief executive of MaxAerospace, a leading
private sector MRO provider since 1994, providing support
to all the major commercial airlines and aircraft operators
in India and the Middle East.
With
aviation infrastructure in the process of being ramped up,
MRO providers said the high cost of entry into the Indian
market, especially on account of high taxes, was proving to
be the main barrier.
They
said if repairs, for example, were undertaken outside the
country, it was not subject to service tax or value-added
tax. Since India is still in the development phase of offering
a good MRO base, most Indian airlines go abroad to get their
aircraft maintained, they added.
"We
are being penalized for being Indian as we are charged taxes;
companies abroad are not," said Malkani, whose engineering
facility is located in Mumbai, supporting a variety of aircraft
and components.
Recently,
Lufthansa Technik, one of the world's largest MROs that had
tied up with the Hyderabad International Airport, pulled out,
saying high taxes were making it too expensive for it to operate
in India.
"Taxation
is a finance ministry matter," said R.K Maheshwary, deputy
director general at industry watchdog in India, the Directorate
General of Civil Aviation.
Yet,
things are moving in the domain.
Recently,
the National Aviation Company of India, the company that owns
Air India, and the European Aeronautic Defence and Space Company,
or EADS that owns Airbus, signed a joint venture agreement
in the area.
They
have proposed that their 50:50 aircraft MRO centre at the
Indira Gandhi International Airport in India's national capital
with an investment of $40 million will start its operations
from early 2009.
Prabuddha
Bharata>>>
Vedanta
Kesari>>>
Vedanta
Mass Media>>>
|
