The Maintenance, Repair and Overhaul (MRO) industry is an indispensable part of the aviation sector. It plays a crucial role in ensuring the safety, efficiency and airworthiness of aircraft. The MRO industry in India has witnessed significant growth over the past few years. However, like other industries, the MRO industry in India is also facing a set of challenges that may impact its growth. In this article, we will discuss where the MRO industry in India is heading, the challenges and opportunities of the industry, the future of MRO in India and Are we on track?
Growing MRO Industry In India
The Indian MRO industry has grown significantly over the past decade due to several factors like favorable government policies, the rise in the number of aircraft in India, and the growth of the aviation sector. The MRO market in India is expected to reach $2 Billion by 2025, growing at a CAGR of more than 10% from 2020 to 2025.
The government of India has taken several initiatives to boost the MRO industry, such as the UDAN (Ude Desh Ka Aam Nagrik) scheme that aims to promote regional connectivity, and the Make in India initiative that aims to transform India into a global manufacturing hub. These initiatives have led to the establishment of several MRO facilities in India.
Factors like low labor costs, skilled labor force, and the increasing demand for air travel in India have also contributed to the growth of the MRO industry. According to a recent report by Boeing, India is expected to have a demand for 2,380 commercial airplanes worth $330 billion over the next 20 years. These factors indicate that the MRO industry in India has a lot of potential for growth.
Challenges and Opportunities in the MRO Industry in India
Although the MRO industry in India has witnessed significant growth, it is still facing some challenges that may impact its growth. The recently conducted International Conference on Emerging Trends in Aviation MRO Industry [EAMRO 2023], organized by Aviakul Group of Companies at Indian Aviation Academy did throw up some interesting facts and figures. The topics of discussion covered the emerging trends such as Convergence of Civil & Defence in MRO, Digitization of MRO, Challenges in implementing new age solutions and many more. Lt. Gen. Ajay Kumar Suri, Director General & Colonel Commandant, Army Aviation presided as Chief Guest. Among the many top honchos of the industry who addressed the conference were Air Marshal Sukhchain Singh, Former AOM, Indian Air Force, Shri. R. P. Kashyap, Director Operations, DGCA & Indian Aviation Academy and the organizing Chairman of the conference Shri. Vaibhav Varun, Managing Director, Aviakul.
One of the challenges faced in the MRO Industry today is the lack of infrastructure and skilled labor. The MRO industry requires a lot of technical knowledge and skilled labor to carry out repairs and maintenance work on aircraft. The lack of adequately trained manpower is a crucial issue, which needs to be addressed to promote the growth of the MRO industry in India. Highlighting this during the eAMRO 2023 conference was Mr VK Shukla who maintained that the Aviation Industry gets only the leftovers of students passing out from colleges. While it could be his individual view, but the fact remains that Aeronautical Engg / AME Courses rarely make it to the Top 5 choices of students aspiring for studies/careers after passing out of schools.
Another major challenge faced by the MRO industry is the high cost of equipment and technology. The MRO industry requires highly specialized tools and equipment that come at a considerable cost. The cost of the equipment and tools is directly proportional to the quality of the work done, which is a critical factor in the MRO sector. Therefore, the industry needs to invest in advanced technology and facilities to ensure that they stay competitive in the market.
Also connected with this high cost of equipment and technology is the reluctance of overseas manufacturers to part with their technical knowhow. Since these manufacturers consider the Repair and Overhauls of equipments /components as essentially a part of their deferred / extended earnings, so for them it doesn’t make business sense to enable an Organization to set up ROH facility in India. This was highlighted in a recent case where the Company Honeywell refused to entertain a request from an Indian MRO to set up a ROH facility for a number of Avionics components used by IAF, that are presently being sent abroad, resulting in time delays, AOG situations and exorbitant costs to the exchequer. This is one area where Indian policy makers need to take note and come up with policies that encourage third party MROs, a point well highlighted by the Lt Gen AK Suri as well during the course of the Conference.
Next comes the high taxes and duties imposed by the government on the import of MRO equipment and spares. This in itself poses a challenge to the growth of the industry. The taxes and duties make it harder for MRO companies to import the necessary tools and equipment required for effective maintenance and repair work.
Despite these challenges, the MRO industry in India also offers significant opportunities for growth. One of the key opportunities is the increase in the number of aircraft in India. With the growing demand for air travel, the number of aircraft in the country is also increasing. The growth of the industry is also leading to new partnerships and joint ventures, which provide opportunities for collaboration and growth.
Another opportunity that the MRO industry in India offers is the focus on sustainability. With the rising concern for environmental impact, the aviation industry is also looking for ways to reduce their carbon footprint. As a result, there is an increased interest in eco-friendly MRO practices. Indian companies can tap into this opportunity by investing in sustainable MRO practices that meet the global standards for the aviation sector.
Future of the MRO Industry in India:
The MRO industry in India has a bright future. With the growing demand for air travel, the number of aircraft in the country is also likely to increase. The government’s initiatives to boost the MRO industry and the rise of the Make in India initiative are likely to provide further encouragement to the industry.
Also discussed during the eAMRO 2023 Conference was the Convergence of Civil & Defence Applications in MRO Industry. Several issues & bottlenecks in achieving the said convergence were discussed and how all the stakeholders can work together in making India a Global MRO Hub in the nearest possible future.
However, to ensure that the industry continues to grow, there is a need to address the challenges faced by the industry. The industry needs to invest in infrastructure and skilled labor, attract talent to join the industry, so as to ensure that the MRO facilities are up to the global standards. The government also needs to create investor-friendly policies that attract more investments into the sector.
In conclusion, the MRO industry in India has experienced significant growth over the years. With a projected growth rate of more than 10% per annum, the industry offers a lot of potential for investors. However, the industry needs to address the challenges faced by it to ensure that the growth is sustainable. With the focus on sustainability and the increasing demand for air travel, the future of the MRO industry in India looks promising.