Hindustan Aeronautics (HAL) is looking at setting up a maintenance, repair and overhaul (MRO) facility to leverage its Bangalore airport asset, which is now closed to commercial aircraft.

HAL Airport was closed on May 24, 2008 after it transitioned commercial flight operations to Bangalore International Airport near Devanahalli. Along with the MRO plan, HAL is also combing across its business segments to expand revenue to make up for the loss in earnings from airport operations. The airport revenue, in the region of Rs 250 crore, is not a significant portion of the over Mrs. 8,500-crore entity, but it is by no means small enough to be glossed over.

HAL director (planning) M Fakruddin said the profitability from the airport business was very healthy. “We will look at expanding revenues from our existing line of businesses,” he told ET . HAL is in advanced stages of finalising a joint venture partner who will bring the licence for civil aircraft maintenance. Budgeting an investment of Rs 120 crore, the scalable model will start with two hangars with a capacity to handle 50 aircraft per annum.

Airlines typically fly their aircraft to MRO facilities in countries like Singapore. Such a facility in India is reckoned to record cost savings and faster redeployment of aircraft into service. HAL is also advancing on its plans to create a civil aircraft that is in the 100-seater configuration.

In fact, it is collaborating with National Aerospace Labs on the concept for design and manufacture of a regional jet. The Rs 2,000-crore plan will pit HAL against global aircraft manufacturers such as ATR, Embraer and Bombardier.

HAL is planning to strategically focus on mega projects and giving a go by to small ticket contract jobs. Some of the bigger ticket size projects include a $120-million award for making engines for Honeywell, structures for Dornier and parts for Bell, Eurocopter, Boeing and Gulfstream.

Source: Economic Times