KPMG in India has unveiled its background paper on maintenance, repair, and operations (MRO) sector, titled ‘IndiaMRO Aerospace & Defence 2016’ at India MRO Aerospace and Defence 2016 taking place in New Delhi. The paper was formally released by Ashwani Lohani, CMD, Air India. Also present were Stephane Lauret, CEO, Saffran India; Dr BP Sharma, CMD, Pawan Hans; HR Jagannath, CEO, Air India Engineering Services; Ravi Menon, vice president, MRO Association of India and executive director, Air Works India; and Pulak Sen, founder secretary general, MRO Association of India. The paper highlights the opportunities in the Indian MRO industry, the impact of the National Civil Aviation Policy (NCAP 2016), the proposed Goods and Services Tax (GST), the Regional Connectivity Scheme (RCS), and addresses challenges related to service quality, leasing, financing, certification and skill development.
The paper also highlights that with oil prices operating at around the US$ 50 per barrel mark, airlines have shifted their focus on aircraft MRO, which accounts for 12-15 per cent of their operating expenses. According to industry sources, merely 10 per cent of the MRO work for domestic scheduled carriers is carried out in India. Approximately seven per cent of airline revenues is being transacted for maintenance in foreign currency. Indian private carriers are reliant on foreign MRO service providers for engine management contracts, component contracts and heavy base checks.
Amber Dubey, partner and head, Aerospace and Defence, KPMG in India said, “NCAP 2016 and the opening up of the defence MRO opportunities have provided the much-needed policy support for the Indian MRO sector. Under the RCS, provision of low cost, high quality MRO services to small fleet operators is critical. Structural reforms, growing demand for air travel, expanding aircraft fleet and diffusion of air transport services into the hinterlands of India provide the ideal platform for the Indian MRO industry to transform from being mere line or base maintenance providers to value providers.”
Sen added, “Indian carriers have been sending their aircraft overseas for MRO when the country possesses reasonably good capabilities. Shortcomings, if any, can be plugged through a win-win collaboration between airlines and MRO providers. India has the potential of evolving into a major MRO hub within a short span, fuelled by the growing fleet, availability of engineering talent and the forward looking NCAP 2016. The growth of Indian MRO industry will not only save foreign exchange for the nation, but also create employment and help in skill-building.”
Aerospace and defence is a focus industry under the ‘Make in India’ initiative and MRO is a key part of it.
