Jet plans to set up MRO facility

Move to cut costs, save time; South India is the likely location.

Jet Airways plans to set up a maintenance, repair and overhaul (MRO) facility in India, possibly in the South.

In its annual report for 2009-10, the country’s largest carrier in terms of market share said: “After a detailed evaluation of various options, it was concluded that the best option for the company was to set up an MRO facility in partnership with an experienced MRO service provider to perform maintenance checks on the company’s fleet in India.” Jet has a 26.6 per cent market share.

“To support the company’s operations and future expansion plans while taking into account all types of aircraft, Jet Airways will need adequate and cost-effective engineering and maintenance infrastructure,” the company said in the report.

The main reason for setting up the facility is to avoid sending airframe maintenance work abroad and perform this labour intensive work at a comparatively lower cost in India. “This will help achieve Jet Airways’ objective of enhanced aircraft availability, reduce maintenance costs, while ensuring that aircraft maintenance checks are of the highest standards.”

Now, Jet Airways sends its aircraft out of the country for heavier airframe maintenance work, which the company said was expensive and time-consuming. Jet has a fleet of 90 aircraft, of which 64 are Boeing, 14 ATR and 12 Airbus.

An email query and message sent to Jet Airways remained unanswered.

Jet recently invested Rs 45 crore from its internal accruals in MAS GMR Aerospace Engineering Company, Hyderabad (MAG). “The investment is a step closer in setting up an MRO facility and the carrier may very well partner with them,” said an industry source.

MAG is an equal joint venture between GMR Hyderabad International Airport and Malaysian Aerospace Engineering Sdn Bhd. The company is engaged in the business of developing and operating an MRO facility for airframes.

The board of directors of Jet Airways had approved the investment proposal at meetings held in January and July. The shareholders approved the proposal at the company’s 18th annual general meeting on August 26.

A Mumbai-based analyst said, “This is a good way of reducing costs and tightening finances. In the last quarter, Jet posted a profit of Rs 3.52 crore, and while it has brought the company into the black, there is more that needs to be done. The company can cut costs in double digits if the MRO facility is set up.”