NAGPUR- The Air India (AI) Maintenance Repair and Overhaul (MRO) depot, now known as AIESL, located in Mihan-SEZ, is on the verge of receiving its inaugural foreign flight in nearly a decade since its commencement of operations within the Mihan-SEZ area back in 2015.
Initially designated to be managed by the American aircraft manufacturer Boeing, this MRO marked one of the earliest substantial investments in the SEZ based in Nagpur.
Air India MRO International C-Check
It was established as part of the offset agreement from acquiring 111 aircraft for Air India and then Indian Airlines during Praful Patel’s tenure as the civil aviation minister.
Presently, there are expectations for a Boeing 777 originating from Kuwait to touch down at the MRO facility for a C check within the next 4 to 5 days. This particular maintenance task represents a high-level, advanced servicing job, reports ET.
It signifies the first instance in which the MRO will directly accommodate a foreign entity, even though the primary mandate of units within the SEZ pertains to the exportation of goods or services.
In a reciprocal arrangement, the units situated within a Special Economic Zone (SEZ) receive tax benefits. Within the same SEZ is another Maintenance Repair and Overhaul (MRO) facility operated by AAR Indamer Technics Private Limited, primarily serving IndiGo Airlines (6E).
Each unit within an SEZ is mandated to generate net foreign exchange earnings (NFE), a process predominantly driven by exports. Initially, the MRO depot was intended to export aircraft maintenance services to international airlines.
Subsequently, Boeing withdrew from the project, transferring it to Air India Engineering Services Limited (AIESL), a subsidiary of the former Air India.
AIESL, in turn, continued to exclusively provide maintenance services for aircraft owned by Air India, effectively serving as an in-house service provider to its parent company.
Nonetheless, owing to its location within an SEZ, the MRO facility was also required to generate foreign exchange through exports.
To fulfill the requirement of generating foreign exchange, AIESL invoiced Air India in US dollars, even when servicing its domestic fleet.
This practice has persisted even after the Tata Group’s acquisition of Air India. Following the Tata takeover, AIESL continues to operate as an independent entity.
The impending arrival of the Kuwaiti aircraft marks the first instance in which AIESL will provide services to a foreign airline. This truly qualifies as an export, according to insider sources.
The establishment of the Boeing Maintenance Repair and Overhaul (MRO) facility was publicly announced in 2005.
During that period, it was anticipated that airlines from around the world would choose Nagpur as their maintenance hub due to its favorable geographical location.
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