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MRO - INDIA : Challenges Ashwani Sharma Quality Manager – Air India Express. MRO - India Hurdles being faced by Existing and prospective MRO operators. MRO – Opportunities started in 2005 at Paris Air Show - PowerPoint PPT Presentation
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MRO - INDIA : Challenges
Ashwani SharmaQuality Manager – AI Express
MRO - INDIA : Challenges
Ashwani SharmaQuality Manager – Air India Express
MRO - INDIA : Challenges
Ashwani SharmaQuality Manager – AI Express
MRO - India
Hurdles being faced by Existing and prospective MRO operators.
MRO - INDIA : Challenges
Ashwani SharmaQuality Manager – AI Express
MRO – Opportunities started in 2005 at Paris Air Show
Between 2005 and 2007, Airlines operating in India stunned the world of aviation by placing orders for hundreds of aircraft worth Billions of dollars. Analysts were surprised by the sheer audacity of new start up carriers placing large orders (100s of aircraft).
MRO - INDIA : Challenges
Ashwani SharmaQuality Manager – AI Express
Airline Orders* Value USD
AIR INDIA (AI, IC, AICL, Alliance)
111 (27 B787 + 23 B777 + 18 B737 + 43 A320 Family) 11.0
Kingfisher 50 (20 A320 + 10 A330 + 5 A340 + 15 A350XWB) 10.0
INDIGO 100 A320 8.0
GO Air 10 1.0
Jet Airways 66 (18 A330 + 29 B737 + 9 B777 + 10 B787) 10.0
Spice Jet 20 B737 2.0
TOTAL 357 42.0 BILLION
MRO - INDIA : Challenges
Ashwani SharmaQuality Manager – AI Express
Sensing the tremendous opportunity. Many established players scrambled to set up shop to make huge profits that beckoned enticingly.
•Air India – Nagpur•Air India – New Delhi•Lufthansa Tecknik – Hyderabad•Jet Airways, Paramount, etc
MRO - INDIA : Challenges
Ashwani SharmaQuality Manager – AI Express
MRO – India Analysts predicted that starting with a modest
USD 250 Million, the Indian MRO market was set for an exponential growth as below :
• USD $1.17 billion in 2010• USD $2.60 billion by 2020
-Frost & Sullivan
• Source Aeronautical Soceity of India
MRO - INDIA : Challenges
Ashwani SharmaQuality Manager – AI Express
MRO – India
The global MRO market was estimated to be worth between $25 billion to $30 billion a year . Inventory in the airline industry’s supply chain was projected to be excess of $50 billion. (Source : FAA Report 2003)
MRO - INDIA : Challenges
Ashwani SharmaQuality Manager – AI Express
MRO – India
One of the major factors that influenced the decision of established players to set up MROs in India was, of course, abundant supply of highly skilled, English language proficient and eminently competitive
manpower.
MRO - INDIA : Challenges
Ashwani SharmaQuality Manager – AI Express
PRESENT STATUS
Of the dozen odd prospective MRO projects only 3-4 have materialized as below
AIR INDIA – Boeing at NagpurGMR – MAS at HyderabadCIAL at KochiAIR WORKS at Hosur
MRO - INDIA : Challenges
Ashwani SharmaQuality Manager – AI Express
As a result of these large a/c orders placed in 2005-2007, commercial scheduled airline fleet size was to treble from 200-250 in 2005 to approx 650-700 in 2011.
By a conservative estimate, approximately 500 narrow body aircraft would clock close to 2 million hours annually resulting in 200 ‘C’ checks per year.
NOTE : Data does not include ATRs.
MRO - INDIA : Challenges
Ashwani SharmaQuality Manager – AI Express
%age of ‘C’ checks done at MROs outside India.
Presently almost 60 % of all ‘C’ checks on narrow body fleet are being outsourced to MROs located outside India.
Only two of the five big operators have in-house capability to accomplish ‘C’ checks.
NOTE : Data does not include ATRs.
MRO - INDIA : Challenges
Ashwani SharmaQuality Manager – AI Express
Flight of Foreign Exchange
Estimated cost of ‘C’ check = USD100,000
Total outgo for 160 ‘C’ checks outsourced would be an astronomical sum of USD 16 Million per annum.
MRO - INDIA : Challenges
Ashwani SharmaQuality Manager – AI Express
MRO – ChallengesGovernment Issues – Taxation problemLack of space – Prohibitive cost - Metro AirportsLack of Infrastructure – Non-metro AirportsVendor absence from IndiaRegulatory Issues
MRO - INDIA : Challenges
Ashwani SharmaQuality Manager – AI Express
MRO – Challenges
•Government issues – • Service tax• Customs duty• Value Added Tax
Taxes and other duties would escalate the cost of a ‘C’ check by 43%
MRO - INDIA : Challenges
Ashwani SharmaQuality Manager – AI Express
MRO – Challenges
•Metro Airports
• Property Issues – Scarce land• High aircraft handling charges• Highest landing feesProposed ATR shifted from Nagpur to
Singapore
MRO - INDIA : Challenges
Ashwani SharmaQuality Manager – AI Express
MRO – Challenges
Non – Metro Airports• Lack of Infrastructure• No direct flights from USA or Europe
MRO - INDIA : Challenges
Ashwani SharmaQuality Manager – AI Express
MRO – Challenges
•VENDORS - OEM – Back Shop Support• Negligible Vendor or OEM presence in
India• Increased cost of spare part acquisition
• High probability of time penalties while undertaking contract work
MRO - INDIA : Challenges
Ashwani SharmaQuality Manager – AI Express
MRO – Challenges
• Regulatory Issues
• FAA /EASA DAR/DER’s or their DGCA equivalent not available India
• Probable logistic challenge
• Information flow hurdle
MRO - INDIA : Challenges
Ashwani SharmaQuality Manager – AI Express
MRO – Challenges
• Infrastructure
• Lack of specialised infrastructure
(Eg : Dedicated painting hangars, L/G Retraction Check Bays etc.)
• Cost / Turn-around time overruns
• Reduction in capability scope
MRO - INDIA : Challenges
Ashwani SharmaQuality Manager – AI Express
MRO – Challenges
•Infrastructure
• Congestion of space in Front line airports
• Lack of proper infrastructure in secondary airports
• Increase in cost
MRO - INDIA : Challenges
Ashwani SharmaQuality Manager – AI Express
MRO – Challenges
•Competition
• Many players entering the market
• Many short term challenges while setting up facilities
MRO - INDIA : Challenges
Ashwani SharmaQuality Manager – AI Express
MRO – Challenges
•Competition - OPPORTUNITY
• Many players will stimulate growth
• Increased chances of synergy
• Healthy competition will energise the market
MRO - INDIA : Challenges
Ashwani SharmaQuality Manager – AI Express
THANK YOU – QUESTIONS?