Fast 5: Post-Air India Privatization, AIESL Eyes New MRO Markets

Sharad Agarwal, CEO of Air India Engineering Services, talks to Aviation Week about how the company is strategizing after the privatization of Air India earlier this year and why the MRO provider may look to upgrade its engine maintenance capability.

Air India Engineering Services (AIESL) was recently awarded European Union Aviation Safety Agency (EASA) approval to conduct type training courses (B1/B2) on Boeing 737, 787 and Airbus A320 aircraft at its Mumbai and Trivandrum facilities. Can you shed some light on this milestone? What were the efforts behind this achievement?

The EASA-type training approval procedure was initiated way back in 2016. By 2019 everything was ready and in place, but right before the EASA auditor could schedule the audit, the pandemic struck. Meanwhile, many internal changes took place in AIESL. Many people in senior positions retired along with internal management shuffling, which complicated the situation, causing further delay. However, the final audit took place in April 2022. 

As per EASA regulations, in order to do any aircraft maintenance under EASA, the AME has to hold a DGCA India license and at the same time they have to be trained under an EASA certified institute. Now onwards, all future trainees will be trained under DGCA and EASA-approved course structures and the students trained at the AIESL facility will be better prepared as they will be under international scrutiny. This approval has given us a tremendous confidence boost and has paved the way to apply for EASA maintenance certification. We are confident in our capabilities and very soon we will be an EASA-certified maintenance facility. Currently, only GMR Hyderabad is EASA approved for base maintenance in India.

Currently, my vague estimate is there are about 500 A320s and at least 100 737s. This number is expected to increase at by at least 50% in the next couple of years. Till now we covered only about 100 of these aircraft, as we were maintaining only the Air India fleet—thus, reducing our market presence to one-fifth. Even if we manage to double this number, it will be a humongous achievement for us.

Boeing recently signed a memorandum of understanding with AIESL under the Boeing India Repair Development and Sustainment (BIRDS) initiative for the MRO of critical equipment on the P-8I operated by the Indian Navy and the 777 VIP aircraft operated by the Indian Air Force. Can you tell us more about the deal? 

AIESL has always excelled in maintenance work, however, we fell a little short in showcasing or marketing our skillsets to the world as we were getting a steady flow of business from Air India. Now with the Air India privatization, we have started exploring other markets. The P-8I is basically a 737-900, and we have conducted regular overhauls on it for Air India Express, including the landing gear and engine. So, when we approached Boeing for the MRO of critical equipment on P-8Is, the Boeing team came to audit our facility and immediately gave us a nod of approval after being impressed with our work.

Many foreign OEMs are spreading their roots in India. Safran recently announced its biggest MRO facility in Hyderabad, and Thales is planning to expand operations in Bengaluru. How do you see the pace of growing competition in the Indian MRO market?

In India the LEAP-1A engine type holds an edge over the other engines. The A320s are powered by CFM LEAP-1A or -1Bs while the 737s are powered by LEAP-1Bs, both belonging to Safran. In case of an on-wing engine failure in India, the engines are sent to Europe, Malaysia or Singapore for overhaul, wherein the normal [turnaround time] is about six to eight months. Now with India rapidly growing as the fastest commercial aviation market, there will be at least 400-500 aircraft powered by LEAP engines in the next two years, and this is an approximate conservative estimate—the actual number might be very high.

With 500 aircraft, 1000 engines and a failure rate of 0.75 per aircraft per annum, roughly about 400 engines will need maintenance every year. Thus, there will be a demand of at least 400 engines in India, which is a huge demand in itself and necessitates the setting up of a shop. Right now, there are just two shops in India that can service a Safran engine—one in Delhi and one in Mumbai. Upgrading these shops would be a logical and a much easier move than setting up a completely new facility, as the new Safran facility might take another three to four years to become completely operational, leaving a huge gap for engine overhaul in India.  

Air India is looking to buy as many as 300 aircraft, which may be A350neos, 737 MAXs or a mix of both. What is the enormity of business that AIESL will get from this deal, and how will it benefit AIESL in the long run?

Air India is currently sending the existing aircraft to the AIESL facility for service; however, the Air India management is maintaining a stoic silence about future maintenance needs. For the new aircraft deal, there is still no clarity on the MRO front. Of course, Air India will have to have an MRO partner and they might explore other options for an MRO partnership. In case Air India is planning to get A350s by this year, it’s already high time for the Indian MROs to start expanding their capabilities to service this newer aircraft version. 

Are any expansion plans in the cards?

We are currently setting up an engine shop in Nagpur along with GE Aviation. The shop will be a one-of-a-kind servicing the GENx engine type. The work is almost nearing completion and the shop will be operational by next month.

Apart from this, we are also focusing on improving our capabilities and hiring new talent. Our first batch of 200 trainees from 2018 will be equipped with EASA licenses and we are training another batch of 150 internal trainees to be absorbed soon. Plus, we will be hiring some open market people, so we are expanding on the workforce front, too.