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© 2005 International Aviation Services Group LtdThe information contained herein is subject to change without notice
Satisfying Requirements for Engine & Component MRO Facilities
in the Indian Sub-ContinentPaolo LironiSenior Technical ManagerIASG
© 2005 International Aviation Services Group LtdThe information contained herein is subject to change without notice
Focus on...What component and engine overhaul facilities
currently exist in the Indian Sub-Continent and what are their capabilities?
What level of testing do they offer? What is the potential for growth over the coming 10
years? To what extent is outsourcing required to meet
airlines’ needs? The process of managing these MRO contracts.
© 2005 International Aviation Services Group LtdThe information contained herein is subject to change without notice
Subjects
1. Current market2. Forces3. Trend4. Future market5. Contract
NOME
© 2005 International Aviation Services Group LtdThe information contained herein is subject to change without notice
Current Market
© 2005 International Aviation Services Group LtdThe information contained herein is subject to change without notice
World MRO MarketMRO Spending by category
Modifications, 7%
Engine, 35%
Line, 23%
Component, 21%
Airframe heavy, 14%
MRO Spending by Region
Asia Pacific, 23%
Latin America, 4%
Middle East, 4%
Africa, 2%
North America,
37%
Europe, 30%
© 2005 International Aviation Services Group LtdThe information contained herein is subject to change without notice
The current engine market
• $38.8bn is the 2005 MRO value• 35% is in engine and engine components
equivalent to $13.8bn• The Asia Pacific region is absorbing 23% of the
total - $352 million• The largest fleets are CF6-80 and CFM56-3
engines
© 2005 International Aviation Services Group LtdThe information contained herein is subject to change without notice
The current engine MRO in India region
• Air India shop – CF6-80– PW4000
• Indian Airlines– V2500 modular shop
• Pakistan Airlines– CF6-50– CFM56-3
© 2005 International Aviation Services Group LtdThe information contained herein is subject to change without notice
Current fleet
• 300 aircraft flying in the region within Wide Body, Narrow Body and regional
• Several engine models• No dominant engine model
© 2005 International Aviation Services Group LtdThe information contained herein is subject to change without notice
Where indian engines are repaired
Jet AirwaysIndiGoKingfisherSpiceJetAir DeccanAir SaharaParamount
© 2005 International Aviation Services Group LtdThe information contained herein is subject to change without notice
Forces
© 2005 International Aviation Services Group LtdThe information contained herein is subject to change without notice
Forces
• Revolution among airlines• Necessity to lower the maintenance costs• Actractivity of the region to foreign capitals• Fragmentation• Delocalisation
© 2005 International Aviation Services Group LtdThe information contained herein is subject to change without notice
Delocalisation
• Geographical position• Skilled man power availability• Regulations
© 2005 International Aviation Services Group LtdThe information contained herein is subject to change without notice
Barriers
• Burocracy• Regulations • Vicinity to China• Staff “poaching”
© 2005 International Aviation Services Group LtdThe information contained herein is subject to change without notice
Timings
• New airplanes are being delivered• Aircraft utilisation is constantly increasing
© 2005 International Aviation Services Group LtdThe information contained herein is subject to change without notice
Trends
© 2005 International Aviation Services Group LtdThe information contained herein is subject to change without notice
Current trends
1. Boeing to open an MRO2. Air India to open a maintenance base in southwest of India3. Kingfisher in talks to open a joint repair shop with foreign
MRO4. Jet Airways to expand hangar in Mumbay5. Snecma to establish engine MRO with Indian Airlines6. Etc…
© 2005 International Aviation Services Group LtdThe information contained herein is subject to change without notice
Attractiveness of the market
• Increase of 4.2 % over the next 8 years• India is ordering 25 % of the total aircraft• Increase of 10% of a single engine repair• The Market in 2015 will be worth $20.8bn• Few engines will dominate the market
© 2005 International Aviation Services Group LtdThe information contained herein is subject to change without notice
Danger of the market
• New entrants• Engine models• Airlines flexibility on engine model
© 2005 International Aviation Services Group LtdThe information contained herein is subject to change without notice
Changes in engine MRO
• Join ventures• Modular engine shops• Limited parts capability• Extended engine parts capability
© 2005 International Aviation Services Group LtdThe information contained herein is subject to change without notice
Future market
© 2005 International Aviation Services Group LtdThe information contained herein is subject to change without notice
The Engine Market in 2015
• Current engine shops will have to change products
• New production facilities will have to be built• More attractive for third party work
© 2005 International Aviation Services Group LtdThe information contained herein is subject to change without notice
Engine parts
• Different forces from engines• Investments are bigger• Inventory is continuously changing
© 2005 International Aviation Services Group LtdThe information contained herein is subject to change without notice
Key factors for success
• Price• Quality• Turn Around time• Customer Support• Comprehensive support to customers
© 2005 International Aviation Services Group LtdThe information contained herein is subject to change without notice
Contracts & airlines needs
© 2005 International Aviation Services Group LtdThe information contained herein is subject to change without notice
Contract
• Suppliers base• Long term relationship• Flexibility
© 2005 International Aviation Services Group LtdThe information contained herein is subject to change without notice
Key factors
• Communication• Clarity of role• Defined service standard• Delivery of performance• Dealing with issues
© 2005 International Aviation Services Group LtdThe information contained herein is subject to change without notice
Airlines requirements
• Concentration on core business• Knowledge of technical engine issues• Operations monitoring
© 2005 International Aviation Services Group LtdThe information contained herein is subject to change without notice
Main concerns
• PMA• DER• Back to birth issues• Component traceability• Redelivery requirements
© 2005 International Aviation Services Group LtdThe information contained herein is subject to change without notice
Highlights
• The actual engine and components MRO facilities have a big potential for growth
• India number of orders will guarantee the MRO to growth and expand
• Airlines will benefit from the growth only if will be able to capitalise on it
© 2005 International Aviation Services Group LtdThe information contained herein is subject to change without notice
Presentation
Paolo LironiSenior Technical ManagerIASG Engines [email protected] Tel: +44 (0)1293 456105 / 456106Office Fax: +44 (0)1293 456107Mobile: +44 (0)7855 404039Skype: lironpa
© 2005 International Aviation Services Group LtdThe information contained herein is subject to change without notice
Thanks for your attention