AIESL plans to offer MRO services to defence aircraft

New Delhi: Air India Engineering Services Limited (AIESL), which serves civilian planes, now plans to offer its MRO services to defence aircraft and aims to garner about 20 per cent revenue from the defence sector.

Eyeing a 50 per cent growth in its topline to Rs 750 crore in the next fiscal, the Air India subsidiary also plans to
rope in overseas carriers in its bid to corner a larger market share in the USD 800 million Maintenance, Repair and
Overhaul (MRO) business in the country.

"This year, we expect to clock around Rs 500 crore revenue from our MRO business. With the growth of domestic and
international traffic in and around the Asia region. We are hopeful of ramping it (revenue) up to Rs 750 crore in
2015-16," a senior airline official said. He said the carrier was also looking at providing MRO services for defence
aircraft, adding, "we expect an up to 20 per cent revenue to come from this sector by the next fiscal."

The total Indian MRO market currently stands at USD 800 million, which is expected to touch USD 2.5 billion mark by
2020 and AIESL aims to corner a major share, he said.

Air India's engineering unit along with the ground handling services were hived off into separate wholly-owned
subsidiaries in 2013. AIESL was set up to provide maintenance services for aircraft, engines and components for its
own fleet as well to other customers.

The engineering arm has last week received the mandatory DGCA certification to carry out maintenance, repair,
overhaul and test of aircraft, engines and components maintenance at any of its facilities spread across Delhi,
Mumbai, Chennai, Kolkatta, Hyderabad and Thiruannathapuram, the official said.

These facilities are capable of maintaining up to 50 wide and narrow body aircraft engines, he said. "This
certification will help us in securing business from the foreign carriers as well. The global carriers are mounting
more flights to India, particularly after Air India joined the 27-member global airlines group Star Alliance. So we
expect to cater to this demand also," the official said.

AIESL is already approved by overseas aviation regulators to certify aircraft of Etihad and Qatar Airways, Mihin
Lanka, Silk Air, Singapore Airlines and Sri Lankan Airlines, he said.

"Prime Minister Narendra Modi's 'Make In India' campaign also raises MRO business prospects in the country, which has
so far failed to flourish due to the high costs," he said.

Noting that Indian MRO market was around 30 per cent costlier than those in the neighbourhood like Sri Lanka, Dubai, Hong Kong, Singapore and China, he said, "if the government abolishes service tax and VAT, we will have an edge over these players."

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