FEASIBLE STUDY OF MRO - AN INDIAN PERSPECTIVE

AGENDAAirline Maintenance, Repair & OverhaulIntroductionObjectivesResearch MethodologyFactorsIndian aspectUpcoming VenturesReferences

MROMRO firms fall into three main categories:

the Original Equipment Manufacturers (OEMs), the airlines, and the independent contractors.

First two categories of firms—OEMs would negotiate maintenance and overhaul arrangements as part of sales packages, and the airlines kept a large number of staff on hand to take care of other maintenance needs.

MARKET TREND$41 billion worldwide market

Compound annual growth rate (CAGR) of 4.8% over the next five years

By 2012, the value of the MRO market for commercially operated jet transports is expected to increase to $51.8 billion, and then to $62.9 billion by 2017

OBJECTIVE

The objective of the study is - To Forecast MRO market. To Analyze key MRO market trend  Comparison of MRO industry with other

countries

 

RESEARCH METHODOLOGY

The data is collected through the sources and is served as inputs in the report.

The methodology used to determine the objectives mentioned in the previous section requires Qualitative research.

The sequence of the research is based on facts and figures updated on the web as well as magazines, articles, newspapers. 

FACTORSHeavy maintenance visits and

modificationsEngine MROComponent MRO Line maintenance

GLOBAL ASPECT

Source: TeamSAI/Ascend

INDIAN ASPECT

Source: TeamSAI/Ascend

INDIAN ASPECT (Contd/-)

Fleet size of all airlines operating in India is expected to rise from 160 in 2004 to 620 in 2014

In two decades in-house MRO has reduced from 85% to 30%

Low-cost carriers (LCCs)are turning to third-party MROs to cut costs and focus on core activities

INDIAN ASPECT (Contd/-)

Assuming 1,000 aircraft in 2012 (both commercial and business), there would be a need for roughly, 50,000 weekly checks, 3,500 A level checks, and millions of night halts.

An aircraft undergoes a check after 600 flying hours. If an aircraft flies the minimum of 12-14 hours a day, on an average it flies nothing less than 2,500 hours annually, which implies that one aircraft will go for a check 3-4 times a year

FLEET FORECAST (INDIA)

INDIAN MRO MARKET

Fleet size of all regions:

ANALYSIS AND FINDINGS

The critical factors for success in the competitive MRO market of the future are:

Competitive service products.Global scale.The ability to run an MRO business: the right

contracts for the right price.Customer focus.

POSSIBLE FUTURE SCENARIOS

1. OEMs take over spare parts but outsource service to service suppliers.

2. Service suppliers take over; OEMs and spare-parts manufacturers act as suppliers. Third-party service suppliers provide full service.

3. OEMs take over, and service suppliers are left out. OEMs control the spare-parts distribution channel, and also perform services themselves.

3. Airlines focus on MRO in a big way. Airline MROs start providing service to external customers – primarily to access the profitable aftermarket and improve overall profitability.

4. Service suppliers provide onsite support to airlines, while OEMs manage the “sense and respond” side of the business and schedule services. Service suppliers perform the actual maintenance process; OEMs monitor aircraft health and schedule maintenance and spare parts based on the performance of the aircraft in flight.

CONCLUSIONMajor OEMs are determined to succeed in the

MRO market. These OEMs probably have the best initial opportunity with airlines that have small fleets.

Service suppliers will continue to gain industry influence.

For maintenance of engines and complex assemblies, the engine OEMs are in a strong position.

For component services and simpler assemblies, the service providers are in a good position, although their main strength is with their own components.

CONTD/-Airlines will focus more on their core business,

which translates into outsourcing even more of their MRO work.

Parts suppliers are likely to become the owners of spare-part inventory in the distribution channel.

RECOMMENDATIONSLessening Tax-Burden on the MRO entrants.

Liberalizing the sector in India to make it competitive.

Treat MRO industry as Service Providers and not tax the setup they import.

Set Quality Adherence norms for the units being set up in India to allow healthy competition.

Make the MRO units globally competitive.

UPCOMING VENTURESLufthansa Technik - GMR Group (Hyderabad, Rs 100

crore)Air India - Boeing (Nagpur / $ 100 million) Indian Airlines - Jupiter Aviation and Logistics – EADS

(Delhi and Hyderabad / $2.57 billion over the next 15 years)

Go Air - Singapore Airlines Engineering (13 MRO Units)

Kingfisher Airlines is in talks with GAMCO (Gulf Aircraft Maintenance Company) of Abu Dhabi on MRO in India.

Turboprop manufacturer ATR is establishing a technical support centre in Bangalore.

REFERENCESwww.ficci.comwww.teamsai.comwww.aviationweek.comwww.aia-aerospace.orgwww.lufthansa-technik.comwww.aviationtoday.com/am

Thank You !!