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The engineering services unit of Air India has set a target of expanding sales by over four times to clock a turnover of Rs 400 crore by 2017-18, a senior airline official said.
While AI would be the anchor customer for Air India Engineering Services, the company hopes to grow revenues by offerings its maintenance, research and overhauling (MRO) services to other airline operators, both Indian and foreign.
Earlier this year, Air India hived off its MRO unit into a separate business entity, Air India Engineering Services, as part of its turnaround strategy.
Separate balance sheet
The unit, which had revenues of Rs 100 crore last fiscal, will get a separate balance sheet starting next fiscal year, the official who did not want to be identified, said.
Air India has placed around 7,400 of its employees under the new entity.
“We wish to project AI Engineering Services as a one stop shop for MRO requirements of both Airbus and Boeing aircrafts…our focus has shifted from just doing AI work to doing work for other airlines too,” H.R. Jagannath, Executive Director, Air India, said on the sidelines of the MRO India 2013 Summit here.
In line with this strategy, the airline is now chasing orders from the Indian Navy, Air Asia and Tata-Singapore Airlines joint venture. If talks are successful, AI Engineering could get the mandate for rendering its services for maintaining the Boeing P8I Long Range Maritime Reconnaissance and Anti Submarine Warfare (LRMP/ASW) aircraft, added Jagannath.
The Indian Navy inducted its first Boeing P-8I Poseidon, based on the Boeing 737-800 airframe, on May 15. This move would be a natural extension for Air India as it already has MRO capabilities for the Boeing 737 family of commercial aircraft under its operations, Jagannath said. Two more P-8Is are expected to join the navy’s fleet.
AI Engineering already has full-fledged facilities in Mumbai and Thiruvananthapuram, which would be utilised to service other airlines.
The recently established MRO facility in Thiruvananthapuram has already conducted around 10 ‘C’ checks, which are periodic inspections that have to be done on all commercial and civil aircraft, said Jagannath.
AI Engineering has also been doing MRO work for GoAir, Jet Airways and IndiGo, but ‘on a piece meal basis,’ as another AI official puts it. Most of the Indian airlines send their planes to West Asia, China and Sri Lanka for high-end MRO work.
Different taxes in India on MRO add up to around 32 per cent, which is acting as a deterrent to the sectors growth.
MRO industry
According to data from the Civil Aviation Ministry, the Indian MRO industry is expected to triple in size from Rs 2,250 crore in 2010 to Rs 7,000 crore by 2020.
adith.charlie@thehindu.co.in
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