New Delhi: India ranks as the third-largest global aircraft buyer and currently outsources 92 percent of its engine MRO business to other nations. At the Aero MRO 2023, which opened on November 21 in New Delhi, Economic Advisor to the Ministry of Civil Aviation, Piyush Srivastava said, “India has bare minimum MRO facilities, if India had adequate MRO services, Go First wouldn’t have landed on its belly.”
Highlighting the deficiency in engine and component MRO facilities in India, he noted, “We handle only 15 per cent. Whatever maintenance work we perform here is at the bare minimum, focusing on line and airframe maintenance.” He further pointed out that component maintenance and engine maintenance are something where we need to cover the ground, in India. Srivastava also proposed that India could open its doors to foreign MRO players.
“Our recent experience with Go First is fresh in our memory. It probably would not have landed on its belly had we had the requisite MRO services in the country. Its supplier, the OEM (PW) in that case, was not in a position to help the airline due to supply chain disruption, and the airline went belly up, which is not a good thing for the aviation sector if you ask me. Do whatever it takes, but we’d need to develop the ability to be in the country,” he added.
Acknowledging that while the government can do much more, he said that the ministry has already taken measures to bring down the GST rate from 18 per cent to 5 per cent and has also made concessions for components and tools among other things.
For the past 5-6 years, India’s largest airline, IndiGo has grappled with persistent Pratt & Whitney engine issues on its Airbus A320neo planes. The Directorate General of Civil Aviation (DGCA) has urged the company to set up a Maintenance, Repair, and Overhaul (MRO) facility in response to recent challenges. IndiGo anticipates grounding around 35 planes in the upcoming March quarter, in addition to the nearly 40 already grounded due to diverse engine-related problems. This situation poses capacity constraints for the airline, which has a fleet of 334 planes. Go First has also faced similar engine issues. Despite ongoing efforts to address these challenges, reports are suggesting that Pratt and Whitney are considering establishing an MRO facility in India.
With French engine manufacturer Safran planning to establish its largest MRO facility for commercial aircraft engines in Hyderabad by 2025, US-based StandardAero is open to set up shop in the country by forming a joint venture (JV) with an Indian firm. All major Indian airlines use engines manufactured by CFM, which is a 50:50 joint venture between Safran and US-based General Electric.
Tayeb Bouhassis, regional sales director (airlines & fleets), StandardAero, while speaking at industry event ‘Aero MRO 2023’ on November 21 said that the company will make the decision after gauging the engine workload at Safran’s proposed facility in Hyderabad. StandardAero, currently runs 55 MRO facilities in 13 countries. “This (MRO JV in India) is something that we have in mind; not probably in short-term but more mid- and long-term,” said Bouhassis.
Having clocked a turnover of more than $4 billion last year, StandardAero needed to first ascertain the volume that Safran’s proposed facility will handle. “To know if a joint venture here would make sense for us so that we can have a portion of that volume,” Bouhassis said.
With major domestic airline operators such as Air India and IndiGo placing two of the world’s largest aircraft orders with Airbus and Boeing, the Indian MRO industry’s total size is expected to grow substantially from about $1.7 billion in 2021 to about $4 billion by 2031.
Another challenge for the Indian aviation sector has been scarcity of spare parts and global supply chain issues. The flight operations have been impacted and now the Indian airlines are turning to local suppliers for non-critical aircraft components, according to industry insiders. According to executives at Air India and IndiGo, the trend prevalent in the US, is being adopted by the Indian aviation sector, as it promises cost and time benefits for the carriers.
At the Aero MRO 2023 event, industry executives said that the substantial orders placed by Indian airlines for planes would not only lead to a sizable fleet, but will enable domestic carriers negotiate favourable terms with lessors for leasing aircraft and the use of local non-critical parts, which will save over 40% cost. The availability time for some parts will also reduce from six months to under 30 days.
Sisira Kanta Dash, Air India’s chief technical officer, said, “I had to import paper used for printers in an aircraft … Why can’t I use local paper? Even the stickers on table or toilet buffers or soap dispenser bottles… These are small things we are looking at. If it is not a critical part, it should be acceptable. In certain leases, I made it a point to write it down that non-critical parts should be accepted. We are in the process of getting approvals.” In aviation parlance, non-critical parts of an aircraft are covered under Part 21 of the Parts Manufacturer Approval, which mandates compliance for sourcing product, appliances and parts with applicable designs via authorized entities.
“It is the way forward. Acceptability is coming. A few years ago we started the project at IndiGo to identify non-critical items like paper, or non-critical, non-load carrying items for cabins. We now have in-house capability to make a part and use it on our aircraft,” Parichay Datta, vice president and deputy head of engineering, IndiGo, said. IndiGo has also started a process to seek approvals from the Directorate General of Civil Aviation for buying non-critical, non-structural items two years ago, and used indigenous such parts for its aircraft. The largest airline is a witness to several instances whereby the airline had to wait for OEM (original equipment manufacturer) to send small parts while the galleys and seats were made.
Datta added, “We did not see any resistance from the regulator. In fact, they were very forthcoming to give us approvals. We started with some parts, we will carry on many more non-structural non-critical items within the cabin.”
The third-party or in-house production approach of non-critical parts is also helpful for airlines which are using older aircraft, and the small parts are no longer available in the market or are in short supply, executives added. In view of the rising demand for these parts, the Indian maintenance, repair and overhaul industry is also preparing to build capacity for the same. Bharat Malkani, President, MRO Association of India said, “The association is ready to pursue to build the small parts which are acceptable to the Indian airlines industry, but we will need clarity from the airlines in what is acceptable in the initial phases of design and production itself.”