AAI to identify sites at Tirupati, 2 other airports for maintenance and repair

By The Hindu businessline

The Centre’s efforts to make the country a hub for Maintenance, Repair and Overhaul (MRO) of aircraft is beginning to take wings. While the Airports Authority of India (AAI) is gearing up to identify a site and invite bids for an MRO at Tirupati and two other airports, new ventures have been announced by multiple players, including Boeing, Airbus, Hindustan Aeronautics Limited, and Pratt & Whitney, for setting up repair facilities in India.

Currently, about 85 per cent of airline-related repair work is done outside the country at MROs located in UAE, Singapore, Sri Lanka, EU and US, among others. Indian aviation operators spend close to $1.4 billion on overseas MRO services.

A senior official at the Ministry of Civil Aviation confirmed that “site identification for the MRO at Tirupati will be carried out by AAI and thereafter bid process will be initiated. This is part of the efforts by the Government to make it easier for MROs to be set up. For example, AAI has come up with a liberal MRO policy with significantly reduced land rentals. Revenue share payment to AAI by MRO has also been abolished.”

Last year, the Finance Ministry had reduced GST on MRO from 18 per cent to 5 per cent. In addition, transactions contracted by foreign OEMs in India are treated as exports with zero rated GST.

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