Domestic MRO services revenue to triple by 2028, reaching ₹5,500-6,000 crore: CRISIL study.

The revenue generated by domestic maintenance, repair, and overhaul (MRO) services providers in India is projected to triple by fiscal 2028, reaching ₹5,500-6,000 crore, according to a recent study conducted by CRISIL Ratings.

This significant growth is attributed to the robust expansion of the domestic civil aviation industry, government support, and ongoing MRO capital expenditures at airports. The study, which analyzed three major MRO services providers accounting for over 90 per cent of the industry’s revenue, also suggests that this growth will lead to cost reduction and improved utilization.

The demand for MRO services is closely linked to the size of the aircraft fleet. With substantial aircraft orders placed by airline operators, the Indian domestic fleet is expected to surpass 1,000 aircraft by 2027, up from approximately 700 as of March 2023. As a result, the overall expenditure by Indian airlines on domestic and global MRO services is projected to exceed ₹25,000 crore by 2028, compared to the levels of around ₹14,000 crore in the previous fiscal year.

MRO services play a crucial role in ensuring the airworthiness and availability of aircraft. Opting for domestic MRO services is considered cost-effective in terms of fuel and logistics and saves time. Ankit Hakhu, Director at CRISIL Ratings, states that the domestic MRO industry’s penetration rate is expected to reach 22-24 per cent by fiscal 2028, up from the current level of approximately 12 per cent. This growth will primarily be driven by less complex line-maintenance services, while the engine and component maintenance segment, where global technical companies are investing to develop local capabilities, will also witness improved penetration.

Despite the promising outlook, revenue generated by domestic MRO providers has been relatively small compared to international counterparts. The revenue per domestic aircraft fleet for Indian operators is less than ₹ 5 crore, while in Singapore, it exceeds ₹400 crore, catering to demand from various countries, including India.

HBL