Aircraft MRO: AAI to offer land in 8 airports

26 Mar 2021 Editorial Team

The Airports Authority of India (AAI) has identified land at eight airports for inviting bids to set up maintenance, repair and overhaul (MRO) units for the servicing of aircraft.

The Ministry of Aviation (MoA) informed the Rajya Sabha that the AAI has come up with a liberal maintenance, repair and overhaul (MRO) policy with significantly reduced liberalised land rentals. It added that no revenue share would be charged from MROs by AAI under the new contracts.

The eight airports where AAI has identified land for aircraft MRO are:

Begumpet (Hyderabad)
Bhopal
Chandigarh
Chennai
Juhu (Mumbai)
Kolkata
New Delhi
Tirupati

In addition to the eight AAI-operated airports, airports at Bengaluru and Cochin, which are operated by private players, have also earmarked land for the development of MRO, the ministry said.

Currently, most airlines fly abroad to service their aircraft. With a view to attracting companies to set up MROs in India, the government reduced Goods and Services Tax (GST) on MROs from 18% to 5% with full input tax credit from 1 April 2020. Transactions sub-contracted by foreign original equipment manufacturers (OEMs) and MRO companies to domestic MRO are treated as exports with zero-rated GST from 1 April 2020. Custom duty on tools, toolkits and spares imported by MROs has been waived. In addition, the government now allows 100% foreign direct investment (FDI) through the automatic route.

The ministry also said that MROs currently operate at 19 airports run by AAI, including those at Hyderabad and Mumbai, which operate under the public-private partnership (PPP) model.

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Also read: Leases on PPP to club loss-making with profitable airports

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