Air Works addition to Adani Group portfolio will mark next phase in India’s aviation industry growth, says company CEO

The head of India’s largest independent maintenance, repair and overhaul (MRO) company as well as a major aviation services provider Air Works has said that their acquisition by Adani Group has come at a time when the country’s aviation sector is preparing to enter the next phase of growth.

Breaking his silence nearly three weeks after the deal was confirmed, the usually reticent Air Works managing director & CEO, D Anand Bhaskar told Business Today in an exclusive interview, “Till now, attracting big money into the aviation sector, and more so into the MRO space, was not happening. That was because volumes and profitability were not there, and the segment was mostly undertaking manpower-intensive jobs.”

Along with the rest of the sector, the MRO segment was also highly regulated and operated at the level of a micro, small and medium enterprise (MSME), said Bhaskar. However, with an increase in volumes across segments and the growth being witnessed in the aviation industry as the impact of the Covid-19-induced slowdown ebbed, the MRO business was also becoming attractive for investors like the Adani Group.

“The industry also needs deeper pockets to take this bigger leap of faith in terms of components, engines, etc. These new areas that we are looking at are capital-intensive. So, there is a need for bigger players to enter the market,” observed Bhaskar on the sidelines of the industry body MRO Association of India’s two-day meeting in New Delhi.

On October 18, the $25 billion Adani Group announced a definitive agreement to acquire Air Works for an enterprise value of Rs 400 crore through its subsidiary Adani Defence Systems & Technologies Ltd (ADSTL). The Indian MRO market is expected to grow three times from $1.7 billion currently to $5 billion by 2030, according to estimates.

The MRO sector provides critical engineering support to keep aircraft airworthy and is of critical importance to aerospace and defence industries alike.

Deal to help in expansion of brand and services

Responding to a question on the impact on the company’s plans, Bhaskar agreed the acquisition would go a long way in expanding the Air Works brand and the bouquet of services offered under its umbrella.

“The landscape would change for the company, the risk-taking ability would change for the company and the capacity to invest should also change for the company,” averred Bhaskar.

On being asked what new areas the company might be looking at following the completion of the deal, Bhaskar said maintenance aspects in aerospace and aircraft components as well as engines were very much on their radar in the near and medium term.

“Defence would be one big thing, where there is a lot of focus from the government to open it up. It is typically a long-cycle business and requires a lot more capital. Secondly, we are seeing the components business picking up traction,” informed Bhaskar.

“When it comes to [aircraft] engines, it is not just about the main engines. There are also ancillary jobs that are out there. And there is not just one engine type, but 40 different engine types! So, there are a lot more things to be done there as well,” he added.

Founded in 1951, Air Works is the oldest MRO in India with a presence across 27 cities, six maintenance bays and more than 900 maintenance experts. The company is currently undertaking heavy maintenance checks on three P-8I long-range maritime patrol and anti-submarine warfare aircraft operated by the Indian Navy in association with Boeing.

 

Also read: Adani Defence & Aerospace to acquire India’s oldest, biggest MRO, Air Works, for Rs 400 cr

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