Listen in as James Pozzi and Swaati Ketkar discuss developments in India's MRO industry and how it is building an aftermarket infrastructure to meet high growth demands.

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Transcript

James Pozzi:

Hello, and thank you for joining us for Aviation Week's MRO Podcast, the latest edition. I'm James Pozzi, MRO editor for the EMEA region. Today, I'm joined by Swaati Ketkar, who is based in India, and of course has covered the aftermarket in India for us for around the last 18 months to two years and has been obviously producing a lot of great stories for us over that time.

Swaati, thank you for joining us for the first time on the MRO Podcast.

Swaati Ketkar:

Thank you. Thank you very much, James, for having me here.

James Pozzi:

Brilliant. Well, let's get started then. At the Paris Air Show in June last year, Air India ordered a total of, I think, 470 narrowbody and widebody aircraft from Airbus and Boeing. A huge order. And of course, IndiGo ordered 500 aircraft, A320neo specifically, from that new generation family. Aviation Week forecast data shows that India will have a steady fleet and aftermarket growth over the next decade. That goes without saying. Swaati, what's your impression of aviation growth and developments that you are seeing right now in India?

Swaati Ketkar:

Aviation in India, we can clearly see, is currently on the cusp of a major revolution with record orders, like you said, from Air India and IndiGo, and recently followed by the order for Akasa Air of 150 jets. Every week there is a new aircraft coming in the country. Now, anyone who's been to Wings India lately can tell you that in the next about five to 10 years, the entire aviation as well as MRO landscape in the country is about to change very drastically. With new aircraft, automatically there is a need for new maintenance talent, tear-down experts, more spares warehouses to establish a full ecosystem and prepare India for the growth which is going to lie ahead in future, and we can see all of it happening. Every day there is a new announcement, be it on the MRO front, be it on the aerospace manufacturing sector or talk about aviation training. Every day there is something new. There's one other new development happening in the country.

Now, in the recently event of Wings India, Airbus has rightly put that India is a force that will power the global civil aviation sector over the next decade. Now, going ahead, as per Airbus forecast, Indian civil aviation market is about to witness this constant need of 2,814 new aircraft, 41,000 pilots and 47,000 maintenance technicians in the next couple of decades. These figures speak for themselves, and the latest aerospace and MRO developments in the country that are happening are an ample proof, I think, of how India is advancing as the third-largest aviation market in the world.

James Pozzi:

Yeah, the growth numbers speak for themselves, really. Some huge numbers that we've seen in our own data and of course across the market from various sources, and some of the data you stated there certainly demonstrates that. So an exciting time ahead I think, and it'll be an interesting one for us journalists who cover this.

Swaati Ketkar:

It is. It is.

James Pozzi:

Yeah, absolutely. Let's talk about some of the things you are seeing on the ground. You recently visited a new school. Obviously, GMR Aero Technic, one of the biggest MROs in India. You saw their GMR School of Aviation. What was that like, and do you think that the pipeline of new mechanics and engineers will be enough to fuel the expected growth?

Swaati Ketkar:

You won't believe the first thought that clicked my mind as I stepped on the school premises was, "I wish I could have studied here." It was that good, the premise. The entire experience was completely out of the world. I've been to a few aviation schools in India, but I must say that GMR Aero Technic has set a global benchmark as far as the School of Aviation is concerned. Now, my tour actually started with the instructor explaining me these two sides of the school. One is the silent side where the students will be taught their theory lessons, and the other is the [inaudible 00:04:29] side where they will be given the practical training. The school is really the first of its kind in India that is going to offer a combined B1 and B2 maintenance engineering licensing program. It is not offered anywhere else in India, so I think this is a major USP of the school going ahead.

Then I actually, when I started touring the school, I saw this huge aircraft engine along with an APU and various other technical components of an aircraft, which are exactly replicated in the lab for the students to get a practical and in-depth understanding of the world that they're about to be entering in future. Then the school will be [inaudible 00:05:10] 140 students in one go, 100 students for DGCA and about 40 students for the EASA program in initial years. And if you look at the demand in Indian MRO industry, most likely what I feel is GMR Aero Technic, the MRO themselves, will absorb all the students which will be passing out of the school. The tour lasted about three and a half hours in total, and I actually had the privilege to sit in the cockpit of this beautiful trainer aircraft. And taking my recommendation, if anyone wants to pursue AME as a career, I would suggest they visit the school and have a look, because it is really class apart from everything that I have seen so far.

And to answer the second half of your question, after I visited the school, I also visited the GMR Aero Technic MRO facility, which is right adjacent to the school. What I saw there literally left me spellbound, because about 10 to 12 aircraft were undergoing various checks in different hangars, and the MRO was a complete buzz of activity, even during 30 degree hot and humid Hyderabad afternoon. I could see the MRO was full to capacity and I also got the chance to visit this huge inflatable hangar, which was the first of its kind in Asia. There were a couple of aircraft undergoing lease return work. I got a chance to see the repair work on a landing gear that was actually going on the inside of an aircraft wing. It was like out of the world experience.

Now, with the demand this high, I'm very sure that the students who are going to be passing out of GMR School of Aviation have a job laid out for them on a plateau right in the adjacent MRO besides it. Since the school is also EASA approved, the students can apply for a job all over the globe, and we already know the global MRO pain point is the lack of skilled labor. I'm sure the students who are passing out of the school should have no problem getting a job, but I'll always conclude saying that only time will tell. Let's wait and see in another four years as the first batch of AME's roll out of the school. We'll get to see whether and how they get the jobs in the market.

James Pozzi:

Yeah, it'd be interesting to keep watch of the results of that and what it produces, but certainly it all sounds and looks very impressive from what you're telling us.

Moving on to another one of the big players in the MRO market in India, Air India Engineering Services. I recently visited, I think, their shop in Nagpur, which is expanding its capabilities. As you reported, AAR Indamer is also planning a major expansion, another major Indian company. What's your impression of the facility capacity and MRO capability expansions you've been seeing, maybe factoring in AI Engineering Services and AAR and the Indamer business?

Swaati Ketkar:

Let's start with the first part of the question, AI Engineering Services. We all know AI Engineering Services, or AIESL as it is also called, the Nagpur facility recently inducted its first foreign aircraft for C-Check, and it was a very major milestone for them. The facility serviced a total of four Kuwait aircraft till now. And as per inside information, I've also heard that the Nagpur facility is currently in talks with about four to five major international operators for C-Checks and we'll hear about it soon as the contracts are signed. As of now, discussions are underway. And speaking of capabilities, this facility is now awaiting their EASA approval, which is expected to come in a few months to carry out the major checks. Now once the EASA approval is in place, there is no stopping this MRO from accepting the lease return aircraft that are operating in India as it'll be obviously both convenient as well as cost-effective for an airline to undergo servicing right here.

Now going ahead, this MRO is also expecting approvals to carry out checks on the latest B 737 MAX aircraft. So I can safely say that Nagpur AIESL facility is slowly evolving as per the needs and demands of today. Now if we turn to AAR Indamer, it's a different story altogether because in 2024, starting of this year, this facility is planning its expansion and they're going to be developing their phase one, which will be major component repair capabilities and it'll include specialized repair capabilities for thrust reversals and nacelles. This phase one is spread on 15 acres of land, which is in Mihan SEZ area right next to the airport. And phase one will have four hangars, six maintenance base and engine run-up bay and a dedicated environment control paint hangar. Then going ahead in phase two, towards the end of 2024 or at the start of 2025, the facility is planning to add another six hangars, which will triple its overall capacity and again they are planning to expand into wide-body maintenance now that the A350s have started flying in India.

So wide-body maintenance will be the need of the AAR by then. Additional phases are again planned out and there will be a total of 16 maintenance base along with component repair shops. And this expansion work is already in progress. So as of now, AAR Indamer is maintaining only the A320s and A321s of IndiGo and Go First, prior to their bankruptcy, but soon they are planning on developing their capabilities for Boeing and ATRs also along with certain defense MRO capabilities and they are also about to get EASA approval very soon. So this facility is obviously expecting foreign aircraft to come for heavy checks and they are also planning to open up a final assembly line for helicopters and fixed-wing aircraft. So huge expansion on cards for AAR Indamer.

Then apart from that, they're also planning to open their own MRO school to provide employment talent. Obviously with so much of expansion they're going to need a lot of manpower, so they'll be opening their own school to recruit their local talent in their own MROs. Now if you look at the above expansion, this MRO, AAR Indamer, is planning to recruit over 100 maintenance engineers and technicians just in this year, in 2024. So my observation after visiting both these facilities in Nagpur, is I can safely say that Nagpur is developing its niche MRO capabilities, and very soon we are going to see many international aircraft flying in and out of Nagpur for heavy checks.

James Pozzi:

Absolutely, yeah, it'd be interesting to see how that further develops. Of course, a lot of domestic MROs with big ambitions there to expand that capability. So again, it's going to be a very interesting few years, that's for sure. Just finally then, Swaati, from your perspective, do you see any hurdles that could possibly hinder the growth in India over the next few years in the MRO sector? And if so, what would you say those hurdles are?

Swaati Ketkar:

Yes, challenges are everywhere and Indian MRO sector has been [inaudible 00:12:14] with challenges since many, many years now. In very recent industry when that happened, Piyush Srivastava who's also the senior economic advisor to the Civil Aviation Ministry, he stressed the need of an engine maintenance and the repair facility in India. As you know, obviously sending engines overseas for servicing is not a very cost-effective way to run an airline. And today, if you see the statistics, only 15% of MRO activity for Indian Airlines is conducted in India. Again, if you see, India is the world's third-largest aircraft purchaser, and if we compare these two, there is just no comparison. There are very few engine maintenance and repair facilities in the country. As a result, 92% of the India's domestic engine maintenance and repair business is outsourced to other Asian countries like Singapore and Malaysia.

So this is one of the major challenge. Another challenge is we need some globally established MROs, but then again that is being tackled with the Saffron facility coming up in Hyderabad. Even Pratt & Whitney are in talks to establish their own engine MRO. Rolls-Royce is also in talks, [inaudible 00:13:24] is also in talks. So these challenges are slowly being addressed. Apart from that, infrastructure availability remains a very major challenge. Then there are certain licensing and certification, red tapes, taxes, duties, supply chain hurdles, lease rentals. These are age-old challenges which are coming out. But the budget session is starting very soon and I'm very sure that all these are already in government's agenda this year. So most likely the government is set to tackle most of these challenges and we are hopeful that they'll come up with some suitable reforms and solutions for the MRO stakeholders of this country.

James Pozzi:

Well, Swaati, thank you for giving us some great insights there into the Indian MRO market and certainly we'll hopefully somewhere down the line have another podcast with you as a guest, talking to us more about India because it's an absolutely fascinating MRO market, of course. Excellent. So again, thank you, Swaati, for joining us today and being on the MRO Podcast.

Swaati Ketkar:

Thank you so much for having me. It was completely my privilege to be here.

James Pozzi:

Absolutely. Well, we appreciate your insights on that and thank you so much. And also thanks to our producer Cory Hitt and of course thank you to you, our listeners. Make sure you don't miss us each week by subscribing to the MRO Podcast on Apple Podcasts or wherever you listen. Thank you.