Following an unprecedented year in aviation history, the government of India recently ushered a policy push to the aviation sector, by way of aircraft leasing and MRO’s. As the active fleet count in India will increase from 600-700 to over 1,200, Aviatorsbuzz caught up with Pulak Sen, organizer of MRO India, IndiaMRO, Aero MRO India and Founder Secretary General of MRO Association of India to discuss the Indian MRO space. Below are excerpts of the interview where Pulak Sen, with his four-decade aviation industry experience that began in 1978, tells Aviatorsbuzz that the trend of sending aircraft by some airlines to neighbouring country’s facilities was finally seeing a change in favour of domestic MROs.
Aditya: How bad was the year 2020 for the Indian MRO sector? Is it looking up now?
Mr Sen: With the Global COVID Pandemic affecting mankind in general from March 2020 and the subsequent lockdown globally, aviation business took a regal toll. With complete shutdown of air services, the entire airline fleet was scattered and parked in airports all over the country for several months.
Amidst this pandemic the biggest gift that the Indian Government gave to the Indian MRO Industry was the reduction of GST from 18 per cent to 5 per cent. However, with all business coming to a standstill, the Indian MROs could not avail for this tremendous benefit at all. Slowly with the normalisation of the restrictions, Indian MROs saw business swelling into their facilities as airlines had decided to return some of their aircraft taken on lease.
Aditya: Will the Indian MRO industry finally take off in 2021? Your forecast.
Mr Sen: The Indian MRO industry is slowly limping back to its feet, but the export market that it had captured before the lockdown is yet to come back to them. I personally feel that it will take at least an 18-month period for the Indian MRO industry to come back to the normal level that they were enjoying pre-COVID period.
Aditya: With tax concessions and other policy initiatives, can India now become a hub for MROs? What has been done and what needs to be done?
Mr Sen: The Indian MRO Industry is at its nascent stage. There are lots of things that have to come in to make this industry robust. The Government has invited OEMs to put up their MRO Shops in India, either in a standalone mode or on a Joint Venture mode. The Government on its part is speaking to OEMs and impressing upon them to make these investments. Only time will tell how fast such OEM facilities will come up in India.
Aditya: How well are we placed in achieving Aatmanirbhar Bharat in MRO?
Mr Sen: No time frame can be established in this case. My answer to your earlier question is all I can say.
Aditya: Tell us about the synergy opportunities between civil and defence MRO’s.
Mr Sen: The Government is keen to explore the synergy between civil and military MROs. A joint working group has been formed to explore the areas of synergy between the civil and military sides. A report will soon be published by the committee.
Aditya: The Indian MRO market is expected to close at US $ 800 million, just a fraction of the global MRO market. Are we on the right track to scale up to meet expected increase in the fleet size of Indian carriers or will it continue going the foreign OEM way?
Mr Sen: India has a large fleet of commercial aircraft. At its peak in pre-COVID period the fleet was around 600 odd aircraft. With over 250 aircraft are on order by various airlines. The Indian aviation market is set to grow phenomenally, but with the lost time due to the current pandemic situation the growth trajectory will be quite slow. Airlines will now be in wait and watch mode to induct more aircraft to their fleet. Mercifully, the trend of sending aircraft by some airlines to neighbouring country’s facilities have ended. Airlines are sending their aircraft Indian MROs.
Aditya: Can you throw some light on the OEM JVs in India?
Mr Sen: OEMs have found some strength in the Indian market and are setting up standalone facilities and creating tie-ups with Indian MROs. This process has only started now, it will require some more time to show results.
Aditya: Does the Indian MRO sector have enough manpower? What is the shortfall and are training facilities adequate?
Mr Sen: Indian MROs are adequately staffed with skilled manpower. Earlier there were shortfalls in training facilities which have been plugged adequately. Some MROs are now offering type training at their facilities on live aircraft for AMEs coming from AME schools, who will be absorbed by the MROs or they can seek employment abroad.
Aditya: Do you see the recycling market for deregistered aircraft getting a push with the government’s free to export norms?
Mr Sen: Only very recently two Boeing 777s were decommissioned in Chennai by Nano Aviation on an assignment by a foreign buyer. These aircraft were recycled for usable parts, which were thousands in number. Earlier also some airlines had carried out these tasks on their aircraft but not on a third-party aircraft.
Another good thing has happened recently in the Indian aviation world. The Government of India and the Government of Gujarat have come together to make Gift City in Gandhi Nagar, Gujarat, an aircraft leasing hub. This hub will not only cater to Indian market but also for the international market too. So, in other words, a lessee does not have to go to Ireland, Mauritius or Singapore to lease an aircraft, they will be able to procure the same in India from a Lessor based out of Gift City at terms better than the international market.
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