Manpower Shortage Becoming a Bottleneck to Air India’s MRO Growth Plans

In January 2015, Air India hived off its engineering department into a separate unit to tap maintenance, repair and overhaul business from other airlines. It still mainly caters to its own aircraft maintenance but aims to double its third party business to Rs 1300 million in FY 2017.

But today Air India is facing a severe shortage of aircraft engineering personnel. Its plans to grow its MRO business faces a big risk.

As per H R Jagannath, CEO of Air India Engineering Services Limited, Air India’s MRO unit has around 600 aircraft maintenance engineers and faces a shortage of around 100-150 personnel. Recently it hired around 100 of its retired engineers on contract but it was inadequate. Air India will require 250 engineers and the manpower shortage could become a bottleneck to Air India’s growth.

Part of the additional manpower through fresh hiring will be utilised to maintain new aircraft being inducted in Air India’s fleet. A part is also to be utilised to cater to vacancies caused by retirements of over 15-20 employees each month.

Hiring engineers essentially means poaching from another airline and is so proving to be a difficult proposition. It normally takes four years for a fresh aircraft technician to secure a type rating and maintenance engineer’s license. An operator like Air India must also groom aspirants for the job. Air India is now offering on-job training to technicians from other companies, enabling them to apply to the Directorate General of Civil Aviation (DGCA) for licence.

“We are seeking support of DGCA and Boeing for the training programme. The government too should support the MRO sector by offering five year tax holiday, ” according to H R Jagannath.

Earlier this year, Air India’s MRO began carrying out ‘C’ check (heavy maintenance check) on Jet Airways Boeing 777 aircraft. It has also signed a MoU with SpiceJet to maintain its Boeing 737 and efforts are underway to secure European Aviation Safety Agency certification for MRO facilities in Nagpur and Thiruvananthapuram.

The MRO unit will also start test and minor repairs of General Electric engines which power Boeing 777 planes at its Nagpur unit later this year and complete overhaul of engines will be carried out from next year. The engine overhaul facility, the first of its kind in India, will significantly boost the MRO business as it can undertake engine repairs of all General Electric engine customers.

Port Blair Set to Get More Air Connectivity with Bengaluru and Hyderabad

Low-cost air carrier GoAir has added Hyderabad as its 23rd destination on its network; services to begin from October 2016. Hyderabad-Bengaluru-Port Blair are now going to be air-connected.

Earlier, India’s leading low cost air carrier, IndiGo, had introduced three new flights connecting Port Blair with Hyderabad, Chennai and Delhi. Port Blair thus became IndiGo’s 41st destination.

As of now, the Mumbai based no-frills airline GoAir flies to 22 domestic airports with a fleet of 21 Airbus A320 including A320neo.

This will provide leisure and business travelers more travel options.

In a press release, GoAir said that it would add Hyderabad in its network with the launch of non-stop flight services between Hyderabad and Chennai, Bengaluru, Bhubaneswar, & Kolkata from October 2016.

Tickets for the new flights are already up for sale, the release said, and can be booked through the company website, NC Airways, GoAir Call Centre, airport ticketing offices, and the GoAir mobile app that is available on both Apple iOS and Google Android.

“This latest addition to GoAir network reflects the airline’s phase of growth with a focus on scaling up operations gradually in the coming weeks while strengthening the value proposition to suit customer’s demand. With new additions of aircraft in coming months, GoAir will operate up to 184 daily flights by the end of December from current 144.” the airline said.

In June 2011, GoAir had placed an order with the European airplane maker, Airbus, for 72 new A320 neo aircraft valued at about Rs 3,24,000 million on list price. Thereafter, GoAir signed a Memorandum of Understanding (MoU) with Airbus for another 72 A320neo aircraft at Farnborough International Airshow in July 2016.

GoAir had last month said that it planned to add five more planes in the fleet by March 2017 besides commencing international operations.

“Hyderabad is a key market in south and central India and a significant base for business and tourism in the region. Adding Hyderabad with its ideal geographical location, we reinforce our commitments towards connectivity across the country,” GoAir Chief Executive Officer Wolfgang Prock-Schaeur said in the release.

“We are happy to welcome GoAir to Hyderabad Airport. As one of the fastest growing airports in the country, our focus has been on providing more options to our passengers and with the introduction of services by GoAir, we now offer a wider range of choices in terms of destinations and frequencies. We keenly look forward to working together with GoAir towards our goal of establishing Hyderabad Airport as the gateway to south & central India,” GMR Hyderabad International Airport CEO, S G K Kishore said.

Can Air Costa be Termed as a Failed Regional Air Connectivity Story ?

August 4, 2016.

Air Costa, the regional airliner from Andhra Pradesh, has halted its flight operations.

Air Costa encountered financial issues with its leasing companies.

Growing cash problems facing new airlines exposed. 

South India’s regional air carrier Air Costa had to suspend operations due to payment issues with its plane lessor. It thus became the second regional airline to do so after Air Pegasus which grounded its operations few days ago. Air Costa regularly gets listed as one of the highest number of monthly flight cancellations and delays as per DGCA data. 

Read : Another Casualty: Air Pegasus; Regional Air Connectivity has Few Takers Left

On July 27, Air Pegasus had cancelled all flights indefinitely. Its planes were repossessed by Dublin based lessor Elix Aviation for non-payment of dues. Its operations remain grounded. It hasn’t even started refunding passengers yet.

The twin developments have triggered concerns over the financial viability of regional airlines. The issue assumes importance given the Modi government’s ambitions around the civil aviation sector.

15871975628_2746b61edbAir Costa’s Embraer E190 jets have said to been grounded by the lessor GE Capital Aviation Services because of pending lease rentals. A lessor gives a grounding notice to the airline when it fails to honor its payment schedule. Ignoring the notice leads to repossession of the aircraft by the lessor. The airline is said to have delayed rent payments on its three E-190 planes to leasing company GECAS. Air Costa has not inducted a fourth E-190 plane because of a dispute with the lessor. There was also a dispute over re-delivery of an E-170 aircraft.

Air Costa stats : Jan-June 2016

The airline, promoted by Vijayawada, Andhra Pradesh-based construction firm LEPL Group, had plans to fly to New Delhi, Bhubaneswar, Varanasi and Pune from this summer. It started flying in April 2015. At present, Air Costa carries about 3,000 passengers – 24 daily flights across nine destinations – Jaipur, Ahmedabad, Bangalore, Chennai, Hyderabad, Visakhapatnam, Coimbatore, Tirupati and Vijayawada. Air Costa is now facilitating 100 per cent refund of the fare and re-booking facility for the passengers. 

Kavi Chaurasia, vice president, marketing and communications, Air Costa states in media: “We’ve just halted for a day owing to the financial issues with our leasing firms. We are negotiating with them. There was nothing specific and we want to get rid of the issue as soon as possible so that we can start operations tomorrow. I’m 100 per cent sure that we’ll be resuming operations from Friday. These issues are bound to happen for a start-up airline. There are absolutely no issue regarding salaries in Air Costa.” He, however, did not give further information on the issues and leasing companies.

air costa“There is no comparison with Pegasus. They had different issues altogether. They even applied for de-listing. Whereas, we want to expand for pan-India presence.” By the end of this calendar year, Air Costa intends to add two more aircraft to its current three Embraer 190 aircraft, as per Kavi Chaurasia.

While the airline claimed it will resume flying, past stories of a cash crunch and unpaid salaries along with the overall financial struggles of regional carriers have cast doubts on Air Costa’s survival.

The twin stories of Air Pegasus and Air Costa have emerged barely two months after the government launched its ambitious regional connectivity scheme. Even as the government is optimistic that the new civil aviation policy cleared on 15 July 2016 will boost regional connectivity and take flying to the masses, experts believe that it’s not possible because regional airlines are inherently unprofitable. Any new airline may not be able to make a profit overnight. They need to be initially financially sound and secured, need to create a network and feed for making money from the potential new market.

Rajiv Nayan ChoubeyIt appears that the only way such regional airlines can survive is by means of a viability gap funding by the government. But, even in that scenario, doubts shall remain over the logic of operating such an airline.

The crisis among regional carriers is coming to light as the government is in the final stages of unveiling a regional connectivity scheme. Civil Aviation Secretary Rajiv Nayan Choubey said regional carriers should be able to configure their business model to meet their financial commitments. “They now operate in a market environment. Under the regional connectivity scheme, they will operate in a protected environment,” he added.