The Noida International airport in Jewar will look to etch its place on the country’s aviation map as a major MRO hub, acronym for maintenance, repair and overhaul, after it crosses its first landmark of launching commercial operations by December 2024.
With the UP Cabinet passing the MRO policy, the decks have been cleared for concessionaire Zurich AG to develop the first of the two MROs planned on 40 acres of land.
On Wednesday, June 29 Yamuna Expressway Industrial Development Authority (YEIDA) CEO Arun Vir Singh said Zurich AG is in talks with top companies to set up this MRO at the airport.
The second and larger MRO will come up on 1,365 acres of land along with a runway and the facility could see a cluster of companies operate there. It has a 2025 completion timeline. Singh heads the UP government’s special purpose vehicle for the airport, Noida International Airport Ltd (NIAL).
The two MROs, pegged at INR 80,000 crore, are eventually expected to give employment to over 60,000 people and bring in investments of INR 30,000 crore over the years, officials said.
“There is an immense opportunity in this field given the upcoming Noida International Airport. Since the first phase of the airport is coming up over 1,334 hectares, it was compulsory to build an MRO facility simultaneously,” the YEIDA CEO said.
The central government had in 2021 introduced an MRO policy that aims to turn India into a global hub for aircraft maintenance and overhaul, which now largely happens abroad.
Some of the proposed changes included leasing land through open tenders, allocating land for MRO for 30 years instead of the current 3 to 5 years, and removing the 13% turnover royalty charged by the Airports Authority of India.
The Indian MRO industry is worth USD 2 billion annually. Of this, only 16% of the business is handled locally. Within the MRO services, the engine and aircraft component maintenance, in particular, is quite lucrative, and the government wants to develop these facilities in the country.
Indian carriers currently send their aircraft offshore for MRO, though some work has begun at the Bengaluru and Hyderabad airports, where the country’s only two smaller MROs are located, officials said.
Singh said India has over 650 commercial aircraft and this figure is expected to increase by 1,000 in the next four years.
“For now, aircraft are taken to Singapore, Dubai, Paris, Seattle and Colombo for major overhauls, and airlines spend around INR 15,000 crore on repairs every year. The Indian aviation industry is expanding fast and that’s why there was a need to develop MRO facilities to cater to these new planes.
Before approval of the MRO policy, several rounds of talks took place in Noida and Lucknow with the international companies. The companies gave their presentations and apprised us about incentives in the policy that can boost investment opportunities. We studied the MRO policies of other states and adopted the best practices.”Arun Vir Singh, CEO, Yamuna Expressway Industrial Development Authority (YEIDA)
Under the MRO policy passed by the cabinet, companies will be entitled to subsidies for setting up operations at the Noida airport. These will be – 5% capital subsidy for those spending INR 500 crore, 8% for investments of INR 1,000 crore and 12% for over INR 1,000 crore.
The UP government has also asked the concessionaire developing the airport to develop it as a transit hub for Asia-Pacific, with a focus on connecting countries such as Japan, Hong Kong, Singapore and Australia among others.
The Noida airport lies southeast of central Delhi, Gurgaon, and Noida and is almost at the halfway point to Agra, the home of the Taj Mahal. The new development is around 90 kilometres from the current Delhi Airport and 85 kilometres from the city centre.
The project is being worked upon in phases. The first phase, set to open in September 2024, will see the construction of two runways and a terminal for 12 million travellers. By the fourth phase, the airport is hoping to gain 70 million yearly passengers and six active runways, the most in the country.
Construction of the runway begins at Noida International Airport
Construction of the runway at the proposed largest international airport has started in Jewar. Tata Projects, which was awarded the tender for the runway construction, has begun measuring and marking the runway. Temporary offices have also been established at the site, with civilian access to the area restricted.
Aside from these, an aeroplane maintenance centre is proposed for the airport site. The centre will be India’s first and only aircraft servicing facility, saving crores of Indian rupees that are currently paid to foreign nations for aircraft repair and maintenance.