Mumbai, Sept. 26:
The Civil Aviation Ministry is looking at small and medium airports to set up MRO (Maintenance, Repair and Overhaul) facilities in India.
MRO business in India is pegged at $800 million at present, and is estimated to grow to $1.5 billion by 2020.
Recently, Air India received the Cabinet approval to hive-off Air India Engineering Services and Air India Transport Services into wholly owned subsidiaries of the airline.
The Engineering Services subsidiary will handle maintenance, repair and overhaul (MRO), while the Transport Services will take care of ground handling services like ticket check-in.
According to Arun Mishra, Director-General of Civil Aviation, space is a major constraint in setting up the MRO facilities. “However, in some places this can be made possible. For instance, in places like Hyderabad and Bangalore, we are giving land to set up MRO facilities,” he said.
To support the fast growing aviation industry, a robust MRO is needed which will also create a lot of high-value jobs for the country, Mishra added.
ATF taxes
Mishra said the Civil Aviation Ministry is working with States to reduce the taxes on aviation turbine fuel (ATF). ATF accounts for about 40 per cent of the total operational cost of an airline company. This has been one of the major concerns for foreign airlines keen to invest in India, after the FDI approval that came about 10 days ago. The imposition of sales tax raises ATF prices and makes it almost 50 per cent more expensive than what airlines pay elsewhere.
Kingfisher Airlines
Mishra said the DGCA will look into the cancellations of Kingfisher Airlines flights in the upcoming winter schedule in October. “We will take into account the capacity of airlines to operate according to the schedule,” he added.
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