Air France KLM picks up 26 per cent stake in Mumbai based Max Aerospace and Aviation Ltd

Air France-KLM reported it had purchased a 26 per cent stake in Mumbai based Max Aerospace and Aviation Ltd. The Franco-Dutch aviation firm Air France-KLM is mulling a plan that will see it create an aircraft components repair facility in India. Under the terms of the agreement, Air France-KLM and Max AeroSpace will jointly build an aircraft component repair facility at a Special Economic Zones that will be capable of servicing Boeing Co. and Airbus SAS planes.

Max Aerospace will start building the MRO facility in the first quarter of calendar year 2011. The facilitiy is expected to be ready by mid-2013. Max Aerospace is a Mumbai-based firm providing maintenance, repair and overhaul (MRO). It was founded as an aviation engineering services organization in 1994.

It has a hangar at the Juhu Aerodrome in Mumbai and is currently building an integrated facility at an SEZ near Nagpur, Maharashtra. In 2004, two large international airlines - Air France and KLM—decided to merge and create one of the world’s largest maintenance firms Air France-KLM, which supports more than 1,230 aircraft operated by 150 global carriers. Air France KLM is a multi-product MRO (Maintenance, Repair, Overhaul) provider.

Bharat Malkani, chairman and managing director of Max AeroSpace said this partnership with KLM will help the firm achieve its component support ambitions, and to have the resources to stay informed of the vigorous growth in the market. The Group's skills and performance are acknowledged worldwide. Becoming an active member of this network is for the firm is a development opportunity not to be missed, he added.

As India’s aviation sector grows, the domestic MRO market is expected to earn a revenue of $1.06 billion (Rs.4,781 crore) by 2015, up from $499 million in 2009, according to a 2009 report by Frost and Sullivan. MRO service requirements in the country are expected to grow annually at a compounded rate of 13.5% in the same period.

Currently, only 5% of component repair is carried out in India. Airlines typically send their components to Singapore, Europe or the US for maintenance and repair. Maintenance accounts for nearly 13% of an airline’s operating cost.

Max AeroSpace will begin constructing the facility in a yet to finalized location in the first quarter of 2011 and the facility is expected to be ready by mid-2013.

18 Nov 2010.