Boeing to establish aircraft maintenance base in Maharashtra with investment worth $100 million

In an investment plan worth $100 million (approximately Rs.500 crore), the Boeing Company plans to establish an aircraft maintenance base in Maharashtra, India. The Maharashtra Airport Development Company Ltd (MADC) will lease 50 acres of land in the special economic zones (SEZ) situated near the Nagpur Airport to Air India (AI) for the establishment of the Aircraft maintenance base.


Air India will subcontract Boeing for the construction of the expected base, an official reported. The aircraft maintenance base is expected to be constructed within a period of three years, with Air India investing a small part for the said base. In this investment deal, Boeing will facilitate the construction and equipping of the base using state-of-the –art technology and would be mainly used for maintenance of the Boeing 777 and 767 by Air India.


Other Airlines will also use the base for the maintenance of their aircraft thus giving immense potential for revenue generation from the base. The deal was appended by MADC vice chairman and managing director, Mr. R.C. Sinha, and Air India’s director, K.M. Unni, in the presence of Boeing’s Suvendoo Ray.  Air India director said the project was a significant move towards the realization of the potential of MRO business in India and meeting the future requirements of the aviation industry. This project is part of a commitment the Boeing Company had intended for the construction of an advanced aircraft maintenance center in Nagpur, located in the heart of India, according to one official.


This new investment deal is being done as Air India experiences rough financial woes and restructuring. Currently, the airline is in the process of restructuring its operations after a prolonged lull in performance. The combined net loss at India’s embattled airlines widened 44.4% to Rs.8, 557.37 crore in the last fiscal year, making it the worst year on record for an industry beset by high costs, excess capacity and a slump in passenger traffic.


State-run Air India alone posted a loss of Rs.5,548 crore in the year ended 31 March, more than double the Rs.2,226.16 loss it had run up in the previous year according to data released on Thursday by the civil aviation ministry and the Directorate General of Civil Aviation, or DGCA. Other major factors that have contributed to Air India’s losses are steep hike in aviation turbine fuel (ATF), rise in depreciation costs due to induction of new fleet and interest rates on aircraft loans and borrowings.

June 12, 2010.