CAS -July 4th Aviation Presentation 1

8/2/2019 CAS -July 4th Aviation Presentation 1

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Global Aviation MRO

MRO activitiesa major expense head for airlines globally

Maintenance Cost contributes as high as 12.2% of the total cost of an airline.

In 2004, global aviation MRO industry was estimated to be a $36 Bn industry.

Estimated to cross$ 62 Bn by 2014representing a growth of 5.6%

Airlines increasingly outsourcing MRO activities to achieve convenience, expertise and minimisation of MRO

cost

Airlines are acquiring new wide-body and narrow-body aircrafts: need for scheduled Maintenance is increasing

Fuel and pilotsalaries 30.1%

Aircraft and

Traffic Service

15.9%

In-flight service

8.3%

M a i n t e n a n c e12.2 %

Administrative

7.5%

Transport

Related 10.0%

/ Depreciation

Amortization

6.7%

/ Promotion

Sales 9.3%

What do the airline spend money on ?

36

62.2

0

10

20

30

40

50

60

70

2004 2014

CAGR 5.62%

Estimated growth in the global MRO market


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India-MRO Market Potential

All those looking at the MRO space need to appreciate that there is enough business for multipleplayers, today rather than outsourcing TO India, there is outsourcing FROM India

Assuming 1000 aircrafts in India by the year 2012, there will be a need for over 50,000 weeklychecks, 3500 A checks, millions of night halts which can be done on the tarmac itself

Over 1000 C will become due each year which will need hangars for executing those checks.Since each hangar can only take 50 C checks in a year, there will be a need for several hangarsacross the country with a three shift operation of staff, going by all projections currently, this givesample business for half a dozen MROs to thrive

Globally 25% of all departure delays are maintenance related, our Research shows that in India

these are about 60%

Presently GMR along with Malaysian airline is setting up an MRO in Hyderabad worth 400 croreswhich would cater not more than 60 to 80 aircrafts per annum


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Industry Players

While leasing is a popular mode for aircraft acquisition world-wide, in India many new airlineshave opted for acquisition through purchase. This model puts the onus of maintenance on theairlines themselves. So, the airlines are required to enter into comprehensive maintenancecontracts. The following chart shows the maintenance relationships established by variousairlines.

Since Sahara was taken over by Jet and Air Deccan by King Fisher, All the maintenance is carriedout at their respective bases.


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Metrics

Both Air India and Indian Air have their jet and engineering shops in Mumbai and Delhirespectively which are equipped to carry out C' checks but constraints on their capacities often

lead to the two carriers outsourcing major engine repairs to workshops in Korea, Hong Kong andGermany

While for each A-320 aircraft a C' check costs between $300,000 and $500,000, for biggeraircraft of Air India the cost can go up to $1.5 million per aircraft.

Jet Airways has plans to procure aircraft worth $3.2 billion from Airbus and Boeing and IndiGo hasordered 100 A-320 aircraft. Kingfisher have also opted for the A-320 family while Spice Jet hasplaced orders for Boeing 737-800 aircraft.

Low-cost carriers (LCCs) have to either fly their aircraft to Abu Dhabi, Singapore or Belgium forsecondary services. The demand for MRO is expected to increase further as many of the Indianairline companies plan fleet expansion.

Overhaul of commercial transport engines is not only the most profitable segment of the MROmarket, it is also the segment with the strongest growth prospects over the next 10 years.

Engine MRO spending worldwide in 2006/07 is estimated at $14-17 billion--a figure thatAeroStrategy expects to grow by an aeverage 4.5% a year, reaching $27 billion by 2016/17
http://www.entrepreneur.com/tradejournals/article/173924266.htmlhttp://www.entrepreneur.com/tradejournals/article/173924266.html


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Metrics Cont The engine overhaul market comprises the largest segment in Indian MRO segment worth $174

million and is expected to grow to $490 million 2014. The state owned airlines have developedcapabilities for engine maintenance and the private airlines routinely source their needs fromindependent MROs

OEMs have also developed a significant market share in the component overhaul market in India.The market size of the component overhaul market was $120 million in 2007 and is expected togrow to $204 million by 2014.

Modifications is another smaller market in terms of size. The 2007 market was worth $43 million

and is expected to be $77.5 Million by 2014. The percentage of the maintenance market is: Engines 40 percent; Modifications 7.3 percent;

Airframe (Heavy) 12 percent; Components 20 percent; and Line maintenance 17 percent.


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AIRCRAFT HANGARS

An airport hangar typically houses largeaircraft and requires large doors that spanmost of the width of the hangar. Schweiss

doors can be built to endure hurricane forcewinds while also maintaining high reliabilityand ease of use. With patented lift strap

system, accessing your airport hangarquickly, quietly, and easily is as easy as thepush of a button.


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HANGARS


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HANGARS


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HANGARS


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HANGAR


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INSIDE HANGAR


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Thank You

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CAS -July 4th Aviation Presentation 1