Safran Engineering, a French aerospace engine manufacturer is going to set up its biggest maintenance repair and overhaul (MRO) facility in Hyderabad. Safran informed that it will be investing around USD 200 million or approximately INR 1,600 core for constructing this facility.
The construction work is expected to start from 2023 and will be completed by 2025.
Safran MRO Facility to Service 300 Aircraft Engines Annually
Safran’s Hyderabad MRO facility will be able to handle up to 300 engine shop visits annually and will be its biggest such facility in the world. Currently, Safran’s MRO facilities are at its headquarters in France and in Mexico.
Safran Engineering and GE – USA have formed a joint venture CFM Engineering which manufactures the CFM56, Leap-1A and Leap-1B engines that power most of the Airbus A320s and the Boeing 737s in India.
According to data provided by the company, there are currently 600 CFM engines powering 330 passenger aircraft flown by 6 airlines in India. The company expects to reach 1,500 engines by the next decade.
High Taxes main Reason behind Reluctance of Global Brands to Set Repair Shops in India
India has been an unattractive destination for global aircraft and engine makers for setting up repair shops due to high taxes. Due to this India’s airlines typically have aircraft and engines serviced at centres located in places such as Singapore, Hong Kong and Colombo, incurring more cost and time.
In March 2022 the Government of India reduced GST on domestic MRO services to 5% which was 18% before.
Commenting on the topic Mr Olivier Andriès, CEO-Safran Engineering, said “We have clearly explained to the central government in New Delhi that the tax regime was a problem. We couldn’t establish any MRO activity in India because, In the previous tax regime, we were taxed twice. We told the government if you change this tax regime, then we will come. And that’s what happened”.
Safran Engineering Future Plans in India
Safran Engineering has also established two new subsidiaries in India namely Safran Aircraft Engines Hyderabad Pvt. Ltd. and Safran Electrical & Power India Pvt. Ltd.
Safran Aircraft Engines will produce components and parts such as rotating seals for aircraft engines. Safran Electrical & Power India will make harnesses for civil and fighter jets.
The company also has plans to form a joint venture with Hindustan Aeronautics Ltd. (HAL) in Bengaluru to manufacture rigid piping for aircraft engines including helicopter engines.