New Delhi. Business in the Asia- Pacific aircraft and engine MRO market is estimated to touch $12.90 billion by the end of 2011.
Global and regional market analyses, including industry challenges, strategic recommendations and enduser perspectives have all made Air Works India Engineering Pvt. Ltd sit up and take stock. And the result is acquisition, joint ventures, building new facilities and attracting prospective customers. India’s largest MRO is actually on the move.
“We have a 60 year impeccable track record of safety and manage 100 aircraft of 50 different types across 15 locations in India. With a 35 percent market share we are India’s only MRO with multiple OEM ASF (Authorised Service Facility) approvals from Agusta, Bell, Bombardier, Dassault, Gulfstream, Embraer, Hawker Beechcraft, Honeywell and Rockwell Collins,” said Vivek N Gour, its Managing Director.
Air Works is a well funded organisation and is looking to grow its capabilities as well as footprint. Its strategic intent is to focus on taking the business global and grow it in the region. Hence they are actively evaluating partnership/acquisition opportunities and expect to close 1-2 deals in the next 12 to 18 months, he said.
And the talk of the town is the acquisition of the Delhi based Inter Globe General Aviation earlier this year. “This acquisition has allowed us to have a significant presence in the northern region of the country where 30 percent of our GA customers currently come from. We have added to our kitty a world class hangar, factory trained manpower and a dedicated customer base which helps us further consolidate our position in the Indian GA MRO market. Moreover, we have added HBC certification to our kitty and are also getting ready to obtain EASA approval for our GA facility which will be a first for India,” Gaur informed.
The entry of international aviation companies with Indian partners into the MRO scene looks like a threat to Air Works’ supremacy in the field but the company doesn’t feel so. “We believe in having a healthy competition and would welcome such partnerships. However, we strongly believe that given our strong customer relationships, large Indian footprint and 60 years of impeccable safety record will make it difficult for a competitor to dislodge us from our market leadership position. We are also actively investing in tooling, factory training of manpower and OEM authorisations, which we believe will help us stay ahead of competition,” stressed Gaur.
On being questioned about Indian carriers continuing to send aircraft abroad for high-end checks, the company informed that this is largely driven by lack of existing capability with MRO’s in India in the past. Air Works has done an information campaign about its capabilities for their existing and prospective customers. With Air Works now committing resources on behalf of the customer, a gradual shift of the customers to trust the MRO with higher checks on their aircraft is being seen.
“Almost all our customers are repeat customers and we lose less than 2 percent of our customers to competition. However, there are a few customers who end up relying on low cost quick fix solution to their maintenance practices. We expect this segment of the industry to function in parallel, however, gradually diminishing in size as customers are able to quantify the benefits of higher maintenance spend in reduced AOG downtime and greater life of components to proper preventive maintenance activity,” he said.
Equity funding of about 1,250 million rupees from two, top-tier private-equity funds, NEA and Elephant Capital, has made the already robust health of the company healthier.
It also has a joint venture, SA Airworks India, with Scandinavian Avionics of Denmark to provide complete turnkey avionics solutions to both commercial and military customers in India. Air Works last year acquired UK-based Air Livery to become one of the world’s largest providers of aircraft paint services. Gaur says the facility set up at Mumbai will leverage repainting, interior repair and refurbishment expertise of UK firm Air Livery, Europe’s largest aircraft refinishing company – which Air Works controls via an 85 percent shareholding – and also adhere to stringent global standards similar to those of Air Livery’s UK operations.
Air Works currently derives 20-30 percent of its revenue from heavy maintenance and is expected to take this up to 50 percent over the next 3 years. They are currently making significant investments in training of manpower and tooling apart from increasing the scope of our approvals. Very recently it completed a 12 yearly structural audit on a Hawker aircraft which was a first for India. “Also, our customers have been encouraging us to perform complex checks in India thereby reducing their costs of a ferry flight to an ASF facility outside of India as well as allowing them to benefit from a competitive rate in India,” said Gaur.
The company has a well developed training calendar for the engineering staff which is a function of aircraft type. Specific trainings are held by aircraft type and are certified both by the OEM and by the regulator DGCA. Typically each engineer invests ten percent of his man-hours every year in training and certification.
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