8 airports identified by AAI for promoting Aircraft Maintenance, Repair and Overhaul activities

The Airports Authority of India (AAI) has identified eight airports to promote Maintenance, Repair and Overhaul (MRO) activities for aircraft and aviation equipment. The eight airports are Chandigarh, Delhi, Begumpet (Hyderabad), Juhu (Mumbai), Bhopal, Tirupati, Chennai and Kolkata.

According to a report titled ‘Status of Aviation Connectivity in the Country’ tabled in Parliament by the Standing Committee on Transport, Tourism and Culture, AAI has developed a business-friendly proposal for MRO with zero airport royalty charges and significantly reduced land rentals for eight airports.

AAI has to identify more airports with available land and resources with the potential to establish MRO facilities from time to time, suggested the committee in the report.

8 airports identified by AAI for promoting Aircraft Maintenance, Repair and Overhaul

The idea to promote the local MRO industry was started in September 2021, when the committee found that the aircraft manufacturer insists the operator enter into a contract for maintenance of the aircraft in the manufacturer’s country, even if such facilities are locally available. This hampers the growth of MRO in the country. To overcome this, it recommended framing an MRO policy.

Accordingly, the Ministry of Civil Aviation announced a policy to promote MRO services in September 2021. The policy opened the possibilities of leasing the land through open tenders for MRO services and abolishing the AAI’s royalty charges, thereby attracting investments to the country.

Besides, the land allotment for entities for MRO will be for 30 years instead of five years. The civil aviation ministry also suggested coordinating military and AAI concerning MRO activities. The vision was to make India a land of MRO hub.

India has the potential to become a global hub as it has the benefits of localisation, low labour cost, a growing number of aircraft fleet and natural talent to drive innovation.

The country failed to attract investments despite the benefits due to high tax components. According to the report, a failure to tap the opportunity to explore the MRO market is a massive loss to the country.

Following the committee’s suggestions, the civil aviation ministry emphasises the collaboration between defence and civilian MROs, by fostering technical and business partnerships between MRO companies in India and defence establishments.

India has the potential to be an MRO hub due to locational advantage, growing aircraft fleet, low labour costs and the natural talent to drive innovation.

The Committee’s report also stated that India has the potential to be an MRO hub due to locational advantage, growing aircraft fleet, low labour costs and the natural talent to drive innovation.

“However, the country has not yet been able to fully exploit the opportunities available in this sector and a major deterrent for the growth of the MRO industry is high taxation of MRO components. Aircraft MRO services are critical in the aviation value chain and it would be of a huge loss for the country if we do not tap the vast technical and skill base available in the country,” the report stated.

Following the Committee’s emphasis on enhanced collaboration between defence and civilian MROs, the government is facilitating civil-military MRO convergence by fostering greater technical and business collaboration between leading MRO companies in India and the defence establishment.

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