Changing MRO landscape in India and Middle East – A comparison!
As the Indian and Middle Eastern markets are geared up to receive a huge chuck of aircraft over the next decade, aviation stakeholders in the respective regions are leaving no-stone unturned to build a strong foundation for a sound aviation eco-system in the region. The major load of this falls on the shoulders of MRO stakeholders as an aircraft requires steady and regular maintenance to remain airworthy. Keeping this long-sighted vision in focus, the MRO stakeholders in India as well as Middle-East have pulled up their socks to grab a large share of the pie from the new incoming aircraft fleet. Let’s have a look as to how these two MRO markets are evolving and preparing for the future.
The pandemic might have put a dent in the MRO markets in India as well as ME, but airline as well as third party MROs in both the regions are fast-developing with strong backing of their respective government aids and support.
Indian airlines keen on building in-house MRO capabilities
One common trend that was observed while studying the Indian as well as the Middle East MRO markets was that the airlines in both the regions have realized the importance to bring the MRO capacities in-house. In India for example IndiGo, India’s biggest domestic carrier build its second largest 13,000 square meter maintenance facility at Bengaluru airport complete the hangar accommodation of two narrowbody aircraft along with infrastructure support like engine QEC shop warehouse and engineering offices for all repair and maintenance work.
Another major airline, Air India is streamlining its operations to achieve global excellence in service. After the acquisition by Tata Group, Air India is focussed on minute details of its operations to achieve excellence and perfection, and naturally MRO forms an important part of it. When Air India was under Government of India umbrella, most of its maintenance work was carried out by AIESL (Air India Engineering Services), but post privatization, the airline has taken it upon themselves to develop and nurture their in-house maintenance engineers so as not to depend on third party MROs for any job.
Air India recently received approval from India’s Directorate General of Civil Aviation (DGCA) to carry out line maintenance on Airbus A350 and A320 aircraft, becoming the Indian airline to receive Civil Aviation Requirements 145 approval for A350 family aircraft.
The achievement marks an important step for Air India to ensure smooth operations and maintenance of the six A350s that will join its fleet through March 2024 in its first phase of the aircraft’s induction.
Air India’s engineering team has been preparing in advance to ensure it is ready to service the A350 aircraft type. A team of about 30 engineers from Air India, Vistara and AIX Connect recently completed training at Airbus’ facility in Toulouse with specialized courses on structure assessment and engine run-up, with some senior executives from the engineering department took an A350 general familiarization course.
In addition, Air India’s technicians received extensive general familiarization training for the A350.
Going ahead, as a one-stop solution to for engineering requirements and to strengthen India’s expanding aviation ecosystem, Air India build a 54,000 ft.2 centralized warehouse consolidating 16 locations throughout Delhi and Mumbai into a single facility. This new warehouse serves as a storehouse for maintenance, checks and repairs of its aircraft and ground support equipment with a capacity to store over a million spares.
Just as the two big airlines from India are geared to develop their own MRO capabilities, two major Middle eastern carriers are also building their own in-house MRO facilities.
Top airlines in Middle East building their own MRO facilities
flydubai is planning a purpose-built $190 million MRO facility in Dubai South reflecting its long-term commitment to further enhancing its in-house capability, which will support its growing fleet. flydubai has been expanding its in-house capabilities over the years and in 2022 received its CAR-145 Base Maintenance Approval from the General Civil Aviation Authority (GCAA) enabling it to perform C Checks and Entry-into-Service for its fleet of B 737 MAX aircraft; bringing the airline added operational and cost efficiencies.
The airline has a strong team of 455 skilled engineers working in Line Maintenance, Technical Services, Materials and Workshops responsible for ensuring the airworthiness and safety of the fleet. Going ahead flydubai plans to recruit another 230 engineers in the next one year. This recruitment drive is well-timed to ensure that the airline is prepared in advance to meet the maintenance demands during the opening of new facility in 2026.
Another major carrier in the Middle East, Emirates has planned a $950 million engineering facility at the Dubai World Central. The one million square meter facility is designated to support the airline’s fleet and operating requirements into the 2040s.
The huge facility will deliver eight maintenance hangars and one paint hangar, with a capacity to handle any size of commercial aircraft up to Code F (A380), an engine run-up facility, some 20 support workshops, storage facilities, and administration offices in the first phase of construction due to start in Q1 of 2024.
Speaking about other private investments in MRO sector, Saudi Arabia’s Public Investment Fund (PIF) has announced investment in domestic MRO Saudia Technic and plans to develop a 10.7 million ft.2 designated MRO village in Jeddah. The site will include a center for engine maintenance, including an engine test cell which will eventually service both narrowbody and widebody engine types.
Saudia Technic currently holds capability for line, base, components and engine maintenance at its facility in Jeddah. The construction of the new MRO site will bring new hangar capacity and an increased number of component shops leading to a larger share of the country’s future market demand.
Middle East Government boost for MROs
Going ahead, the Government of Saudi Arabia recently unveiled the global investment drive with the aim of attracting 100 million tourists by 2030 in Saudi Aviation Policy. To meet this demand there will be a huge influx of new aircraft in the Kingdom of Saudi Arabia in turn rising the demand for MRO market.
The Vallair Group and the National Industrial Development Center, established by the Government of the Kingdom of Saudi Arabia (KSA), signed an MoU to develop the aerospace industry in the Kingdom and throughout the Middle East. Both parties will form joint working teams to develop narrowbody MRO, aircraft disassembly, component repair shops, aircraft painting, and full training for all capabilities.
Foreign OEMs eyeing Middle Eastern market with caution
Honeywell announced two agreements during the Dubai Airshow expanding its footprint in ME. The 10-year deal with Saudia Technic covers a global license to service the 331-500 auxiliary power unit installed in the Boeing 777. The full-service MRO organization will become Honeywell’s first authorized service center in the Middle East for the 777’s APU.
In August 2023, Boeing and Joramco established a new Boeing Converted Freighter (BCF) line in Amman, Jordan with Joramco becoming the first MRO supplier in the Middle East supporting future Boeing freighter conversions of both domestic and foreign aircraft.
The rise & rise of third-party MROs and JVs in Middle East
The year 2023 saw massive development in the MRO sector in Middle East with many new third- party MROs as well as airline hangar sprouting up all over the UAE. The expansion work at Etihad Engineering’s maintenance facility in Abu Dhabi is almost nearing completion. As a part of its expansion plan Etihad Engineering added 540,000 ft.2 of incremental space to its current facility along with two new widebody bays dedicated to B777-300ER passenger to freighter conversions.
In November Sanad officially announced the opening of its Leap Engine MRO in Abu Dhabi, marking a significant milestone as the first facility in the Middle East specializing in CFM International Leap 1A and 1B engines. This strategic move came on the heels of an 11-year agreement with GE Aerospace and Safran Aircraft Engines, which was forged at the Paris Air Show back in June.
The new MRO center is poised to bolster Sanad’s servicing capabilities significantly. According to Mansoor Janahi, CEO of Sanad Group, the facility is designed to handle annual servicing for up to 200 engines.
Saudia Technic that was formerly known as Saudi Arabian Aerospace Engineering Industries is creating an MRO Village in Jeddah, where it will inspect, repair, overhaul, and upgrade APUs.
In a separate, five-year deal Egyptair Maintenance and Engineering has gained a license to provide a flat-rate component repair service for aircraft operated by its sister airline. The deal covers Egyptair’s Airbus A320 and A330 aircraft, along with the 737 and 777 from Boeing.
Joramco has expanded its presence in Jordan’s capital two new hangars, the first conducts line maintenance with capacity for P2F conversion services and a large volume able to handle one Airbus A380 or four narrowbody aircraft. A second proposed hangar will focus on aircraft painting services, with capacity for one Boeing 777 aircraft or two narrowbody aircraft.
Etihad Airways Engineering has inked a pact with Amros Group to offer transition Continuing Airworthiness Management Organisation (CAMO) services to its customers as a part of its comprehensive suite of aircraft maintenance and engineering solutions.
Etihad Airways Engineering also announced its ambitious project to expand the capacity of its 500,000sqm aircraft maintenance facility adjacent to Abu Dhabi International Airport in collaboration with Aircraft Support Industries.
Airbus expects the Middle East aviation services business to witness a 4.7% average annual growth until 2041, surpassing the global average of 3.7%. Airbus also Middle East to witness an addition of 56,000 new pilots, 51,000 new technicians and 100,000 new cabin crews. Worth $9 billion today, the market is expected to be valued at $25 billion by 2041.
The industry is expected to recover to pre-pandemic levels this year with maintenance and training leading the way backed by digitalisation and innovation along with investment in new technology. Airbus further predicts that the demand for highly-skilled labour will increase by more than two million people over the next 20 years in ME.
The Indian MRO market forecast
Now, let’s shift focus to Indian market, as per CRISIL Ratings the revenue generated by domestic maintenance, repair, and overhaul (MRO) services providers in India is projected to triple by fiscal 2028, reaching INR 5,500-6,000 crore.
This significant growth is attributed to the robust expansion of the domestic civil aviation industry, government support, and ongoing MRO capital expenditures at airports.
The demand for MRO services is closely linked to the size of the aircraft fleet. With substantial aircraft orders placed by airline operators, the Indian domestic fleet is expected to surpass 1,000 aircraft by 2027, up from approximately 700 as of March 2023. As a result, the overall expenditure by Indian airlines on domestic and global MRO services is projected to exceed INR 25,000 crore by 2028, compared to the levels of around ₹14,000 crore in the previous fiscal year.
Aircraft OEMs are ramping up production to keep up with demand and Asian operators are expected to take delivery of a significant chunk of new fleet arrivals. Increased aircraft production and delivery will usually translate to higher demand for aviation components and spare parts.
OEMs are also seeking reliable suppliers in India to meet the rising demand, and by becoming an approved supplier for OEMs India is opening its doors to new markets and partnerships.
OEM engagements in India
Airbus contracts
Airbus has inked aircraft component manufacturing contract with about four Indian suppliers, mainly Mahindra Aerospace, Aeques, Dynamatic Technologies and Gardner. These contracts are a part of Airbus’ make-in-India initiative to boost the country eco-system in component manufacturing like sheet metal, machining and extrusion profiles”.
As a part of the contract, the four companies will supply airframe and wing parts for Airbus A320neo, A330neo and A350s. With such contracts Airbus plans to ramp-up of commercial aircraft programmes globally along with strengthening the capability and capacity in the aviation ecosystem of India.
Airbus already procures $750 million worth of components and services annually from India and the latest contracts will add significantly to those volumes. Interestingly, every Airbus commercial aircraft has components and technologies that are made in India.
Hindustan Aeronautics (HAL)’s rise in commercial aerospace sector
Airbus has signed an agreement with Hindustan Aeronautics Limited (HAL) to provide the A320 tool package along with special consulting services to HAL to set up an aircraft maintenance, repair and overhaul (MRO) facility in Nashik, Maharashtra, this agreement is a part of Airbus’ strategy to support HAL’s entry into serving commercial aircraft in India and to build a sound MRO eco-system in India for the ‘Make-in-India’ initiative.
Safran Aircraft Engines has signed a MoU (Memorandum of Understanding) with Hindustan Aeronautics Limited (HAL) to develop industrial cooperation in forging parts’ manufacturing for commercial engines.
Foreign OEM engagements in India
Safran Aircraft Engines have inked a pact with PTC Industries, to manufacture titanium-casting parts for CFM LEAP engines. The first titanium casting parts for LEAP engines are scheduled to be delivered early in 2024 for the LEAP engine powering single-aisle jets.
PTC Industries have recently invested about INR 300 crore to set up a titanium recycling plant in Lucknow, Uttar Pradesh, India. The plant will be the first of its kind plant in the private sector in the country. One of the most interesting aspects of this facility is that it will recycle the waste generated by the aerospace industry while making titanium castings. The facility is expected to come up in next three to four years.
Safran is all set to set up one of its largest LEAP MRO facilities in Hyderabad. Safran is also involved in a joint venture with HAL called Helicopter Engines MRO Pvt. Limited (HE-MRO).
Thales is set to open an avionics MRO facility in India towards the end of next year with an aim to double the number of engineers that it employs in India from 1, 500 to 3,000 in the next three years.
Rolls-Royce is also mulling the idea of setting up an MRO facility in India after signing the Air India contract of 100 engines.
Boeing and GMR Aero Technic are to establish a new facility for converting Boeing passenger aircraft into freighters in Hyderabad to support the growth of air cargo in the country making GMR Aero Technic the first Boeing supplier in India that will have the capability to support future conversions of both domestic and foreign aircraft
With more and more Pratt and Whitney (P&W) engines getting grounded by domestic carriers, the company is considering setting up a maintenance, repair and overhaul (MRO) facility in India, sources from DGCA has claimed that the regulator is pushing the OEM for an MRO facility to solve the impending engine crisis in the country.
Boeing announced a significant expansion of its partnerships within the Indian MRO ecosystem over the last year, like AI Engineering Services Ltd., Horizon Aerospace, and Air Works Group.
Boeing is planning to build a one-of-a-kind engineering research and development facility by investing over $200 million in Bengaluru, India. The facility will be built on a 43-acre campus and will be Boeing’s largest facility of its kind outside the US.
The development of third-party MROs in India
After almost a decade, the AI Engineering Services (formerly known as Air India Engineering Services Limited/AIESL) facility in Mihan-SEZ, Nagpur, India welcomed its first international customer, a Kuwait Airways B777 aircraft for a C-check marking an important milestone for the AIESL as the facility served a foreign airline for the first time
AI Engineering Services (AIESL) Trivandrum recently inducted its first Boeing 737 MAX aircraft for a 36-month heavy check.
Air Works received the European Aviation Safety Agency’s (EASA) approval for its twin hangar engineering facility at Cochin International Airport and is now able to offer full Maintenance Planning Document (MPD) support for the Airbus 320 family of aircraft, including A318, A319, A320 and A321 from a second facility.
GMR School of Aviation is all set to open any time soon, provide the fully integrated Aircraft Maintenance Engineer (AME) licensing program with a four-year course will include two years of classroom training and a two-year training in maintenance, repair and overhaul (MRO) at GMR Aero Technic followed by aircraft type training.
Government push to develop MRO pockets in the country
The Indian government and domestic MRO stakeholders have begun planning and development of MRO hubs in various pockets of the country, including a development at the twin airport project in Noida.
The Government of Uttar Pradesh plans to develop an MRO hub near Noida International Airport, which is currently under construction. As a next step, the Yamuna Expressway Industrial Development Authority (YEIDA), which handles infrastructure near the airport, is preparing to issue a global tender for an MRO facility, as part of the airport’s second phase expansion.
Another MRO hub will soon come up at Tirupati International Airport, recently a delegation from Canadian aviation visited the airport to assess the feasibility of the project. The delegation will submit its report to the Government soon.
At the same time, a construction boom is underway. The Delhi and Bengaluru airports have established dedicated MRO facilities for select private airlines, with more in the works. Plans are also in place for the setup of MRO facilities at the airports in Belagavi, Bhopal too.
The Ministry has termed this phase as the ‘the time is right now’ for the country to look deeply at manufacturing aerospace products in India.
NITI Aayog, has recommended that the country take incremental steps to boost its MRO sector like setting up joint ventures with established global MRO players, first focusing on segments with less-stringent IP control such as electrical and electronics, avionics and structural repair, and gradually ascending the value chain.
But is this enough? Or is there a need for more and what else needs to be done to create a sound MRO ecosystem in India. The question is still under debate at a lot of aviation talk shows and exhibitions across the world.
All-in-all both the Middle East and Indian MRO market is rapidly developing to create a solid foundation and a strong eco-system in the respective countries for the huge fleet influx that the two countries are about to witness over the next couple of decades.
