Noida Airport Set to Call for Expression of Interest for MRO Services This Week
Officials have announced that Noida International Airport Ltd (NIAL) will invite expressions of interest (EOI) for the development of Maintenance, Repair, and Overhaul (MRO) facilities at the upcoming Jewar airport near Delhi. The EoI period will be open until October this year, and NIAL is anticipating responses not only from commercial airlines and private operators but also from aircraft manufacturers, stated a senior officer.
Noida Airport
MRO, an abbreviation for Maintenance, Repair, and Overhaul, encompasses the vital activities involved in ensuring the airworthiness and safe operation of aircraft, aircraft components, and systems through maintenance, repair, and overhaul processes.
“We will soon initiate the process of inviting EoIs for the development of MRO facilities at Noida International Airport, most likely within this week. We are expecting a positive response from private operators, airlines, and aircraft manufacturers interested in the MRO services,” said Arun Vir Singh, the Chief Executive Officer of NIAL, in an interview with PTI.
Singh announced that the deadline for submitting expressions of interest (EOI) would extend until October of this year. The inputs received will guide our decision-making process regarding the future direction, which could involve establishing a joint venture or exploring alternative approaches for developing MRO facilities.
Initial Step in Expression of Interest (EOI)
An expression of interest (EOI) serves as an initial step in the tendering process, enabling interested parties to indicate their intention to participate in a specific project or contract. This allows the procuring entity to evaluate the suitability of potential bidders before proceeding with the formal bidding process.
Singh emphasized the Uttar Pradesh government’s objective to transform the Noida airport into a significant hub for airline operations, cargo transfers, and MRO services. He highlighted the absence of a major facility elsewhere in the country, underscoring the necessity for such a hub in the region.
According to the senior IAS officer, the government has implemented various measures to support the establishment and expansion of MRO facilities in the state. These initiatives include providing incentives and subsidies to attract MRO operators, such as offering land allocation and tax benefits.
Singh, a prominent government official involved in the airport’s development from the start, stated that the ultimate goal is to position Uttar Pradesh as a prominent MRO hub within the country.
A report by Niti Aayog in 2022 highlighted that India is on track to become the third largest purchaser of commercial planes worldwide, following the United States and China. With a current fleet size of approximately 713 aircraft and plans to add over 1,000 more in the near future, India’s aviation industry poises for significant growth.
Due to expanding fleet size and favorable government policies, the Indian aerospace industry has emerged as one of the rapidly growing markets worldwide.
With a remarkable annual passenger growth rate of 15 percent before the COVID-19 pandemic, the Indian aviation sector is projected to become the third-largest air passenger market by 2024.
Compound Annual Growth Rate (CAGR)
According to the report, the escalating civil aviation industry presents a compelling opportunity for the development of the Maintenance, Repair, and Overhaul (MRO) sector in India. Although still in its early stages with a current industry size of USD 1.7 billion as of 2021, it is expected to reach USD 4.0 billion by 2031. This growth would signify a Compound Annual Growth Rate (CAGR) of 8.9 percent, surpassing the global average of 5.6 percent.
The report also highlights several key factors, such as rising consumer demand, an expanding fleet size, favorable policy interventions, and labor arbitrage, that have the potential to drive the growth and advancement of MRO services in India.
The first phase of development for Noida International Airport, located in Jewar approximately 75 km from Delhi, is currently underway. Also, expected to be operational for commercial flights by the end of 2024.
To oversee the development, construction, and operation of the project, a special-purpose vehicle called Yamuna International Airport Private Limited (YIAPL) has been established. The developers will develop the airport over a span of four phases, covering an expansive area of 5,000 hectares.
Zurich Airport International AG has entrusted its wholly-owned subsidiary, YIAPL, with the responsibility of implementing this public-private partnership project. The concession period for the airport project began on October 1, 2021, and will continue for a duration of 40 years.
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