The business models of civil MRO need to look into military aviation linkages and the military MRO needs to open their facilities for utilisation by civil MRO segments
Maintenance, Repair and Overhaul (MRO) in military aviation has been an integral part of the force structure. All the Indian Air Force (IAF) erstwhile bases had some deep level workshops to repair aircraft based there. They were mostly accident or battle damage repairs undertaken to put them quickly back for operations to aid the war effort. During World War II (WW-II), Air Force Station, Kanpur had an elaborate set up to support air operations in the Far East. No 322 Maintenance Unit was formed in 1940 in the twenty one TATA hangars at Chakeri, Kanpur. The functions of the unit included arming of bomber and fighter aircraft such as the Liberator, Lancaster, Hurricane and Tempest. The unit was further expanded to include aircraft storage and servicing activities, while the logistics support and aero-engine storage functions operated at Armapur Estate, 25 km from Chakeri.
In August 1945, after Japan surrendered to the Allied Forces and hostilities came to an end, No 322 Maintenance Unit was disbanded and Royal Air Force Station, Kanpur came into formal existence. No 1 Aircraft Repair Depot for servicing and No 10 Aircraft Storage Unit for storage activities at Chakeri were merged to form No 1 Base Repair Depot (BRD) and Group Captain Harjinder Singh took over as the first Commanding Officer of this new unit. Nostalgic moments included induction into the IAF in 1954, of the first jet aircraft, the Vampire and the Depot undertaking its major servicing in that very year. Over the years, No11 BRD repaired and serviced a variety of aircraft, such as the Tempest, Spitfire, Prentice, Auster, Harvard, Mystere, Toofani, Otter, Bell Helicopter, Vampire, Hunter and Avro aircraft. It also overhauled Martin, Griffen, Nene, Verdon, Goblin MK-34-35, Avon 203-207 and AL-7F-1 aero-engines. Reclaiming 50 Liberator bombers from junkyard became the first feather in the Depot’s cap. The Depot retrieved a writtenoff Spitfire aircraft from salvage dump and made it airworthy. It took to the air in 1950 with Pilot Officer Roy Chowdhury on the controls. In fact, Air Vice Marshal Harjinder Singh was the first engineering officer to fly the Spitfire.
Today, No1 BRD is engaged in major servicing of AN-32 transport aircraft. Similarly, overhaul requirement of transport and helicopter fleet of the IAF necessitated setting up of No 3 BRD at Chandigarh on August 20, 1962. The requisite facilities were set up with Russian collaboration and commenced the first of the overhauls of the IL-14 transport aircraft and the MI-4 helicopters. With the induction of new helicopters, the Depot graduated to overhaul of MI-8 and MI-17 helicopters. In fact, the Depot has today become the knowledge centre for all Russian helicopters and has undertaken life-extension of MI-25, repair of MI-26 and upgrade of MI-35. Also, established in 1975 at the peak of modernisation programmes in the IAF, 11 BRD commenced operations by overhauling Sukhoi Su-7s, only to last till 1982, followed in 1987 by the MiG-23. and the MiG-29 in 1996. With collapse of the Soviet Union, MiG-21 spares were not easily forthcoming, forcing the BRDs to work on indigenising rotables and aggregates of avionics and airframes. An Inter-Agency Group for Life Extension was formed to work on indigenous life extension technology. As the inductions into IAF with newer technologies were undertaken, so were the various BRDs established for MRO of the aircraft, rotables, Avionics and aero-engines. Today there are total of eighteen BRDs in the IAF catering to the MRO requirements of various airborne and ground-based weapon systems.
Hindustan Aeronautics Limited (HAL) was established on December 23, 1940 at Bangalore as Hindustan Aircraft. In 1943, the Bangalore factory was handed over to the United States Air Force without any change in management. The factory expanded rapidly and became the centre for major overhaul and repair of American aircraft and was known as the 84th Air Depot. The first aircraft to be overhauled was a Consolidated PBY Catalina followed by every type of aircraft that operated in India and Burma. When returned to Indian control two years later, the factory had become one of the largest overhaul and repair organisations in the East. In the post-war re-organisation, the company built railway carriages as an interim activity.
ESTABLISHED PLAYERS IN INDIA ARE UPGRADING THEIR HEAVY MAINTENANCE CAPABILITY AND PROVIDING CUSTOMERS WITH AN OPTION TO REDUCE TURNAROUND TIME AS WELL AS COST OF AIRCRAFT MAINTENANCE
Airlines in India spend about 15 per cent of their revenue towards maintenance, the second-highest cost item for airlines after fuel. Generally, airlines carry on-tarmac inspections (A and B checks) in-house and work with third-party MROs for engine, heavy maintenance (C and D checks) and modifications. Almost all airline MRO infrastructure in India is captive and is largely with Air India, with some fully operational independent third-party provider with an EASA-certified facility for heavy maintenance capability for Airbus A320, ATR 42/72 and Boeing 737/NG family of aircraft. GMR has set up in partnership with MAS an operational facility meeting EASA standards at Hyderabad. A significant percentage of the business aviation fleet in India gets heavy maintenance and modifications done at OEM approved facilities in Europe, UK and the US. This trend is gradually shifting as established players in India are upgrading their heavy maintenance capability and providing customers with an option to reduce turnaround time as well as cost of aircraft maintenance. A key inflection point for this segment of the industry will that be when MRO’s in India upgrade their facilities to global certification such as EASA in addition to OEM certification.This will enable customers to access globally certified quality of maintenance services locally at their operating base. The other key challenge which is faced by the industry is non-availability of spares in the region which leads to frequent grounding of aircraft. This is driven by a lack of OEM support for the Indian market which is gradually changing with growth in the market and the custom duty regime which discourages MROs from stocking parts on behalf of customers.
Induction of military aircraft are planned in a big way over the next few years. The list for the IAF includes FGFA, additional MMRCA beyond the 36 Rafale already contracted for, single and twin-engine fighters, additional Su-30 MKI, 75 more basic trainers, two more AWACs, replacement for Avro HS-748 as also of the aging An-32 in the near future, advanced light helicopters, light utility helicopters, light combat helicopters, and upgraded versions of Tejas. With such inductions, there is a need to look at the MRO segment to ensure that serviceability of these platforms is no less than 80 per cent. This implies that the original equipment manufacturer (OEM) including HAL has to set up MRO shop jointly with Indian private players. The core MRO capability of the BRDs need to function as an interface with the industry. The Indian civil carriers are expected to double their fleet size in the next five years and there is a rapidly growing need for induction of civil helicopters in the police, para-military establishments and for emertgency medical services. Thus, there will be significant growth in MRO activities both in the military and and civil sectors. It is expected that the combined MRO spending will be around $50 billion by 2025. The Indian MRO sector has the ability to absorb the technology transfer at depot level for airframe as well as components and aero-engines.
When we talk of MRO, we are referring to the segment related to line maintenance, airframe heavy maintenance and modifications, overhaul of engines, components and accessories. The line maintenance is undertaken by the operator or a third party whereas the other segments are specialised activities which are capital-intensive and high skilled areas. The stringent airworthiness and flight safety requirements are ensured by regulatory mechanisms through CEMILAC and DGCA in India. The OEMs have their regulatory mechanisms rooted in EASA or FAA regulations which have to be adhered to by the operators. In the case of military MRO, additionally life extensions studies and reliability improvement programmes are an integral part. Similarly, since the military platforms do not get replaced at the desired intervals, operational upgrades to keep abreast of technology and above the adversary’s capabilities, have to become part of military MRO.
What needs to be appreciated is that both the civil and military MRO is a aational air power asset and needs to be in sync to enhance the combat potential of air power. There is a need to co-operate and collaborate in this endeavour to exploit and take advantage of the combined skill sets, infrastructure for optimum utilisation of infrastructure of the country. Technology today is similar for deployment in civil and military platforms and it is now possible to seriously consider collaboration. The business models of civil MRO need to look into military aviation linkages and the military MRO needs to be ready to utilise these and open their facilities for utilisation by civil MRO segments. A mutual trust and understanding needs to be developed and nurtured.
The military MRO is primarily based on BRDs and the associated ecosystem of local vendors. Over the years with BRDs at Nasik, Sulur, Kanpur, the nearby HAL supporting ancillary industries and the civil industrial eco-system have been included in the defence MRO fold. HAL has MRO established for the fleets that are licence-produced or they are the OEM. The closed-door policy adopted by HAL till now did not open doors to the MROs in the civil sector and no third-party MRO for these aircraft have emerged. It is only recently that HAL has begun outsourcing some airframe structures of the Su-30 and Tejas aircraft to Indian private entities. Thus, there is a demarcation in the military MRO space with IAF and HAL. A beginning has been made to get traction of 11 BRD with HAL (Nasik) division in the joint Su-30 MKI aircraft overhaul at the BRD. Similarly, the outsourcing of activities by HAL in this MRO, is also being used by the IAF. This is the beginning of collaboration that needs to find more avenues in the long run. MROs for Tejas and ALH variants will be at HAL. With HAL moving to become an integrator of outsourced manufacture, it will only be appropriate to hand over MRO of these platforms to a third party Indian firm.
WITH HAL MOVING TO BECOME AN INTEGRATOR OF OUTSOURCED MANUFACTURE, IT WILL ONLY BE APPROPRIATE TO HAND OVER MRO OF THESE PLATFORMS TO A THIRD PARTY INDIAN FIRM
The military MRO has some unique characteristics. The primary need is the aircraft availability requirements on a daily basis along with surge requirements during operations. The MRO must be able to self-sustain and support the front-line squadrons. Singularly the battle damage repairs on fast track is the need in modern high-tech aircraft. To meet operational challenges posed by the adversaries, the IAF has to retain an edge by undertaking rapid upgrades of the avionics and weapon systems which the concerned MRO facility must be able to provide. HAL has been able to carry out upgrade of Jaguars to DARIN-2 and DARIN-3, MiG-27 avionics upgrade and now is upgrading the Mirage-2000 as a series modification done by OEM abroad. The skill sets need to be available at front line bases to generate the confidence to keep the aircraft on operational readiness. Since military MRO is a captive facility, the development of sub vendors in spares and repairs are few and even they need OEM certification. The possibility of third party of similar systems in civil aviation with adequate regulatory support, needs to be seriously considered.
Military aircraft technology is increasingly modular and there are similarities in the civil aviation transport and helicopters fleet. As discussed above due to OEM regulatory mechanisms, these are compartmentalised and no common MRO process have been encouraged till now. No private player will venture to bridge this gap because the military systems will generally be of low volume. The newer aircraft inductions afford an opportunity to relook at the aggregation of such MRO to third party. Airbus and Boeing flight refuelling aircraft, AWACs, CASA-295 transport aircraft, etc come to mind straight away.
The civil MRO models are based on OEM or direct venture of operators with the OEM or utilisation of an approved third party regulated by the OEM. The biggest civil MRO is with Air India which is captive to their fleet and it is only recently that they have aggressively marketed their facility for other civil airlines including the IAF and the Indian Navy. The Indian industry ecosystem is too small to support this MRO. However, many smaller players have entered the MRO market, but their scope is limited to low levels of maintenance on various civilian fleets. Many joint ventures (JVs) have been inked or are in the pipeline to increase the MRO base in India but their business models must be cost competitive with offshore facilities to make sense.
MANY JOINT VENTURES HAVE BEEN INKED OR ARE IN THE PIPELINE TO INCREASE THE MRO BASE IN INDIA, BUT THEIR BUSINESS MODELS MUST BE COST COMPETITIVE TO MAKE SENSE
An area in which the civil MRO is non-existent is the Russian transport and helicopters which are in the Military MRO domain. No facility exists to support the Russian fleets and hence it is a good opportunity for investment in India. In not so a distant future, there will be a need to replace the aging An-32 fleet and the cost of Russian platforms with the large numbers required will lead to a Russian transport aircraft being also considered. This will open an opportunity for the Russian MRO industry.
There are huge commonalities in the civil and military MRO segments. The difference are in the volumes and the different regulatory requirements. Each one can tap into each other’s resources provided the issues of airworthiness and regulatory mechanisms are sorted out. The Aircraft General Spares (AGS), repairs, software services and processes can be dovetailed into the indigenisation process. The MRO supporting industry developed individually, now needs to collaborate and participate globally.
With more common fleets being inducted on both sides and HAL/NAL likely to develop the regional transport aircraft, there is a need to have CEMILAC and DGCA drafting joint airworthiness policy directives. The skill development of military and civil MROs needs to be harmonised for mutual acceptability of core knowledge and practical skills. The volumes of manpower required in the civil MRO and the rigorous military captive training needs to be relooked as a part of India’s aviation skill development.Cross utilisation of third party into military MRO now needs to be pursued vigorously. The plant-in-plant concept prevalent in the automobile industry, needs to be considered in the BRDs and HAL. The manufacture of Su-30 rudder by Dynamatic Technologies, a Bengaluru firm at HAL Nasik premises, is a beginning in this direction by HAL. Engagement of the BRDs with civil industry needs to grow which can be an asset in enhancing capacity, skill utilisation and back-up during times of operational necessities. Gradually, it should move towards transparent utilisation of each other’s manpower to meet the task requirements. A degree of mutual trust and understanding is essential breaking the traditional barriers of each other’s working cultures.
HAL is the only multi-faceted aviation industry in India with all the specialisations in its various domains. It therefore has to become a rallying point for other aviation industries to grow and enhance the aviation base in India. Aggressive outsourcing of its manufacture and MRO industry is the way ahead for its own growth and that of the country’s industrial strength. This is a good opportunity for HAL to consider hiving its MRO to private players and take them in its fold for the support of the home-grown Tejas, ALH and its variants including the IJT as and when it is operational. This will create a conducive environment for synergy between military and civil MROs.
The IAF, HAL and the DRDO establishments have among them, the entire aviation testing facilities. These are being used in the military domain albeit in isolated packets. The facilities have been established with great care and cost and are a national asset which need to be utilised by all aviation players. They need to be made available to all the civil MRO operators to utilise and enhance the facilities further to global standards. A beginning has been made by IAF to announce that its facilities at BRDs and ASTE are available to private industry for use. Flight testing of aircraft and new systems is available at ASTE, Bengaluru and can be used by developers and industry within the country for its certification and airworthiness requirements. Business models need to be developed for such activities utilisation which are economical and transparent. ASTE and NFTC, Bengaluru need to be designated as national air power assets for industry in the development of aviation.
Technology has bridged the gap in military and civil aviation specifications primarily due to consumerism needs. Military aviation standards are being harmonised with various civil aviation standards. The high volumes in civil aviation systems in all areas is increasing rapidly. It is up to the military to take advantage of the growing civil aviation business market. Indian MRO market can leapfrog into this domain particularly when India is in the process of new inductions both in civil and military aviation.
Out of box thinking is the need of the hour to make the MRO in aviation successful in the ‘Make in India’ era. A high-power joint committee under the aegis of the Ministry of Defence and Ministry of Civil Aviation is suggested to look into all the areas to generate a national policy for cooperation and collaboration of the MRO in civil and military domains which will enhance the national air power potential of India.