Crisil upgrades ratings on Air Works

Crisil has upgraded its long-term as well as short-term credit ratings on Air Works, according to a company statement on Thursday.

The long-term and short-term ratings on the aviation MRO (maintenance, repair and overhaul) services provider have been upgraded to BBB/Stable and Crisil A3+.

The upgrade reflects Crisil's expectation of a significant improvement in the credit risk profile of the company over the medium term," Air Works said in a statement.

These improvements are the result of a change in the company's strategy that now increasingly centres around India and South Asia, in line with the government's increasing push to the development of domestic MRO industry, it said.

The rating upgrade reaffirms our business strategy, including the restructuring of our balance sheet. It is also especially commendable since it recognises 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," said company's MD and CEO D Anand Bhaskar.

Over the past 18 months, Air Works has been steadily increasing its capacity utilisation and has signed several long-term maintenance contracts with leading airlines and global OEMs such as Boeing and Embraer, leading to a substantial improvement in its operating performance, the company said.

As part of the ongoing transformation, the company has also successfully sold certain non-core parts of its portfolio including air-livery, Argus, and parts of ATE France, utilising the proceeds to retire more than 60 per cent of its debt besides expanding its maintenance footprint to Kochi, which is expected to be operational by the end of the fiscal, the company said.

Air Works has base maintenance facilities at Hosur (Tamil Nadu) and Mumbai, and once the Kochi facility becomes operational, it will have a presence across 27 cities pan-India.

The MRO operator serves a portfolio of clients across business and commercial aviation besides the Indian defence services.

The Hosur facility is both DGCA and EASA (European Aviation Safety Agency)-certified and undertakes maintenance work for its clients that include both domestic and international airlines, aircraft lessors, business or private jets, as well as the Indian defence services.