MRO Industry In India: Challenges & Flight PathDespite growing passenger traffic and considerable fleet size, the Indian MRO sector has not seen a corresponding growth, owing to certain challenges

After the pandemic left a considerable dent in global aviation, air travel is back. With Indian airlines such as IndiGo, Air India, Vistara, Akasa Air placing humongous orders for fleet expansion, the Indian aerospace industry has emerged as one of the fastest expanding markets globally. As part of it, the Maintenance, Repair and Overhaul (MRO) operations play an important role in ensuring airworthiness and availability of aircrafts. With the sector beginning to open up, there are expectations for the global commercial aircraft Maintenance Repair and Overhaul (MRO) market, which was badly impacted by grounding of aircraft and airlines shelving most MRO activity.

The Directorate General of Civil Aviation's Traffic Report for March 2023 states that the passengers carried by domestic airlines during January - March 2023 were 375.04 lakhs as against 247.23 lakhs during the Jan – March 2022 period, thereby registering an annual growth of 51.70 per cent and monthly growth of 21.41 per cent.

According to a NITI Aayog report, the size of the MRO industry being USD 1.7 billion as of 2021 – it is expected to reach USD 4.0 billion by 2031, registering a CAGR of 8.9 per cent as compared to the global average of 5.6 per cent. The MRO segment is divided among: Line Maintenance, Component Maintenance, Airframe Heavy Maintenance and Modification Engine maintenance. MRO becomes the second most expensive item after fuel and airlines spend around 12 to 15 per cent of their overall revenues on maintenance.

India is the world's third largest domestic aviation market – with a domestic traffic of 275 million – and is expected to surpass The United Kingdom (UK) to become the third largest air passenger market – including both international and domestic passengers – by 2024.

尽管增长passen等固有优势ger traffic and considerable fleet size, the Indian MRO sector has not seen a corresponding growth, owing to certain key bottlenecks. One of the key factors is the increased presence of OEMs in the aftermarket. "The OEMs' ability to quickly capture market share in the aftermarket is largely due to their control over Intellectual Property (IP) related to training manuals, data design, etc. This adversely affects engine and component manufacturers and poses a serious challenge to the vision of an indigenous MRO industry in India. Secondly, OEMs charge exorbitant consultancy fees that restricts MRO players to diversify and expand their services," said a report by NITI Aayog namedMRO in India.

Another issue is infrastructural woes where major airports in India, have little or no provision of land for establishing MRO hangars within/ near the airport. This leaves MRO operators with limited choice to position themselves in proximity to the airports, compelling them to incur augmented logistics and operations costs. As per a 2021 Deloitte report, India at present outsources 90 per cent MRO services to countries such as Singapore, the UAE, and Sri Lanka.

MRO是一个capital intensive sector and therefore requires large capital expenditure for establishment and expansion. "The impact of the COVID-19 pandemic has significantly reduced the business of airlines and MROs with marginal reduction in costs. The resultant decline in profitability has led to reduced availability of funds for players in the aerospace industry. As a result, access to credit has either been very limited for MRO operators or have been accompanied by exorbitant collateral demands," the report added.

The industry is plagued by multiple other challenges and the stakeholders need to come up with identification of priority areas, promoting home-grown technology and self-sufficiency, thus expanding global outreach. The rising consumer demand, increasing fleet size, favorable policy interventions can potentially fuel growth and development of MRO services in India which will provide economic benefits such as lower costs, reduced turnaround time, less inventories, etc.

Besides, aircraft are often met with incidents/serious incidents/technical snags. Technical snag (defect) means a condition existing in an aircraft (including its systems) or aircraft component arising from any cause other than damage, which would preclude it or another aircraft component from performing their intended functions. During operations, an aircraft may experience technical snags due to malfunctioning of components/equipment fitted on the aircraft which require rectification by the airlines for continued safe, efficient and reliable air transport service. MRO facilities are important to avoid such incidents/serious incidents.

Emphasizing on the importance of MRO facilities in order to avoid such incidents/serious incidents, Dr. Mahesh Y. Reddy, director general, Infrastructure Industry and Logistics Federation of India (ILFI), a lobby group, said, "Maintenance, repair and operations (MRO) facilities should come up in a big way in the country in all the designated centers. The government policy is to create more and more MRO across the country for catering to both domestic and foreign airlines so as to emerge as a repair hub."