Air Works Focuses on India, Opens Kochi Shop

IATA forecasts that air trips per capita in India will grow 10% annually in the years through 2038. That should provide plenty of work for Air Works, India’s largest independent MRO.

The company is refocusing its efforts on its home market, restructuring its balance sheet and stabilizing its finances. A major credit agency has recognized the progress.

Over the past 18 months, Air Works has steadily increased capacity utilization and signed several long-term maintenance contracts with leading airlines and global OEMs such as Boeing and Embraer, all of which has improved operating margins.

The MRO has also sold non-core businesses, including paint shop Air Livery, part of paint shop ATE in France and its Argus unit. The proceeds helped reduce Air Works debt by more than 60% and open a new maintenance base in Kochi, an Indian port city with nearly 700,000 people.

“With Kochi operational, Air Works will have an enviable and the widest pan-India presence among Indian MRO operators in 27 Indian cities,” says spokesperson Gaurav Sahni.

The MRO now has base maintenance facilities at Hosur, Mumbai and Kochi, serving commercial, business and defense aviation. The Company’s Hosur facility is certified by both India’s Directorate General of Civil Aviation and EASA.

The financial transformation and focus on India’s growing market has prompted Crisil, a credit rating subsidiary of Standard & Poor's and McGraw Hill Financial, to upgrade Air Works long-term and short-term ratings to BBB/Stable and Crisil A3+, respectively.

The credit analysts expect “significant improvement in the credit risk profile of the company over the medium term” as Air Works concentrates on India and South Asia and India’s government fosters development of the nation’s MRO industry.

“The rating upgrade is an important milestone, and it reaffirms our business strategy, including restructuring our balance sheet,” says CEO D. Anand Bhaskar. “It is also especially commendable since it recognizes Air Works’ operating efficiency, market position and growth trajectory over the course of the past 18 months, in a scenario where a lot of companies are undergoing stress.”