Wednesday, March 3, 2010

Hyderabad Aerospace Park Gets First Tenant


Aviation Daily Mar 03 , 2010 , p. 16
Neelam Mathews

The opening of the CFM56 Customer Training Center at the strategically located GMR Aerospace Park — occupying space on either side of the runway at Hyderabad Rajiv Gandhi Airport — has led the way to more companies entering an arena that until now has failed to attract companies.

The Aerospace Park plans to focus on attracting services such as MRO and manufacturing to realize offsets emanating from defense projects and logistics.

It is in talks with an OEM for a helicopter assembly facility that are expected to be coompleted in three to four months, D. Ravindran, chief operating officer-aviation and aerospace business, said. Not naming the company, he added, “They have already got offsets [they are committed to].”

GMR’s joint venture with Malaysian Airlines Aerospace Engineering for C- and D-checks now has another partner — Jet Airways — that plans to take up an equity of 11% initially and then increase it to 26%. The $70 million-$100 million facility will be ready by July next year. Currently, work is under way to obtain certification from Malaysian authorities, followed by India’s Directorate General of Civil Aviation, and then the European Aviation Safety Agency.

“We’re in a nice position to be in. With SpiceJet and Jet Airways fleet coming to us, 70% of our capacity is already booked. We can do 80-85 aircraft a year,” said Ravindran. Talks are on with carriers in neighboring Nepal and Bhutan that run skeleton fleets. The company is looking at doing $200 million worth of business in its first year.

“We’re trying to run before we crawl,” says Ravindran. As India’s aviation bounces back, GMR is creating a momentum to push manufacturing of components. Discussions are also on for seat reconfiguration that has become big business in India with an average time of 20-25 days. An avionics training center is also in the offing.

While the company is upbeat that it will attract engine shops perhaps even a first level of maintenance by CFM that has started a training center, CFM Chairman & CEO Eric Bachelet told The DAILY there had been no decision made on the shop. To be sustainable, a shop needs at least 50 visits a year. “Already Air India has a shop, so I don’t see the need.”

Bachelet said Hyderabad was a natural choice given its central location, modern airport and tax advantages. “We think the area will grow as a hub for India and it will be cost-effective for students,” he added.

CFM is making an investment of about $50 million in the next 10 years in India on engines, tooling, IT and people.

Bachelet noted the company provides free training when it supplies engines, and it would like to expand its reach. Training in France and the U.S. is expensive in terms of time and costs, he said.

Bachelet is adamant that there will be no change in thinking on using parts certified as PMA — Parts Manufacturer Approval. “Our engines and design are certified, and we qualify the origin of the parts. It is a matter of cost to airlines, and we feel we have material solutions that are competitive and airlines airlines know OEMs are behind them,” he said.

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