MC EXCLUSIVE Iran-Israel conflict can threaten supply chains of Indian aviation MRO companies

"With global shipping supply chains facing disruptions, the import of many aviation parts are also expected to be impacted. Most Indian MRO companies depend on OEM (Original Equipment Manufacturer) imports for turbo-jets, turbo-propellers and other gas turbines as well as aircraft parts," a senior executive from AIESL told Moneycontrol.

While most MRO companies in India maintain a stock of products in their inventory, supply-chain disruptions can lead to shortage of parts that can lead to aircraft being grounded until parts are available.

Maintenance, redelivery checks to be hit

He added that if supply-chain disruptions escalates in the next few months, Indian MRO companies will struggle to carry out heavy maintenance and redelivery checks for domestic airlines.

"In the past few years, there has been a tremendous disruption in supply chain and it has affected MRO services across the globe. While slower recovery of air traffic in other countries helped India to secure aircraft parts quickly in the past, that is not the case anymore. Getting parts, specifically for six-year checks, which are heavy checks, and also for aircraft redelivery checks can be a challenge" the executive added. 

Redelivery checks represent significant maintenance evaluations when an aircraft is at the end of its lease period with an airline.

According to the terms between the airline and its lessor, a comprehensive heavy maintenance or redelivery check is mandatory. This process includes replacing components and performing essential services, and ensuring that the aircraft is operationally fit for further commercial operations. Typically, these extensive checks are performed after a six-year period.

"The closure of the Strait of Hormuz is unlikely to significantly impact the domestic MRO segment's supply chain, despite its heavy reliance on US and European imports. Imports by air, typically dominate the sector, driven by the high value, low volume, and time-sensitive nature of components. Almost entire part requirement for line checks (routine checks undertaken before every take off), which account for more than 80 percent of sector’s revenues, are imported by air. Only some heavier parts like landing gears, air frames etc. required for heavy maintenance and redelivery checks are imported by sea, thereby limiting any potential impact of the Iran-Israel conflict on the domestic MRO industry,"Manish Gupta, Deputy Chief Ratings Officer, Crisil Ratings told Moneycontrol.

India’s aircraft components market to nearly double by 2033

India’s aircraft components market touched $16.22 billion in 2024, and is projected to nearly double by 2033, propelled by localisation drives, policy support, and growing global partnerships. While components worth over $2 billion are exported annually to global giants like Airbus and Boeing, the rest of the market is made up of imports.

Similarly, another executive from an Indian MRO company told Moneycontrol that most aircraft parts are imported from the US, France, Mexico and Germany, and if supply chains between India and these countries take a hit, domestic airlines will be forced to look at foreign players in the Middle East or Malaysia or Singapore for their engineering needs.

''Companies like GE Aviation, Safran Aircraft Engines, Airbus and Boeing have bigger bases in the Middle East, Malaysia and Singapore for spare parts, and for engineering equipment in India. Any disruption in supply chains for aviation products will not only delay the engineering capabilities of domestic MROs but will also lead to higher expenses for airlines, which will likely cause airlines to look at foreign MROs for solutions," the second executive said.

He added that a majority of the MRO work of domestic airlines are already going out of India. "Be it OEM support or spare support, any supply-chain disruption will further amplify this situation as has been the case for the last few years."

While government officials acknowledge that the Indian MRO industry is likely to face supply- chain disruptions, they said it was too early to predict the impact and whether airlines will be forced to ground more aircraft .

The current Indian aviation fleet stands at 714 commercial aircraft and 17 cargo, totalling 731 aircraft. Of these, 486 are Airbus types. There are also 143 Boeings, 62 ATRs, 28 Bombardier Q400s, ERJ5, 1 E-175, two Caravan and two Dornier 228.

AIESL, in its bases, has several capabilities -- from cabin refurbishment to aircraft weighing to component repairs to airframe repair to engine repair and overhaul. Apart from these bases, it undertakes line maintenance at various stations at home and overseas, such as Ras-Al-Khaimah, Sharjah, Dubai, and Kathmandu, all with wheel change capabilities.

Air Works India, India’s largest third-party MRO, is certified to maintain more than 50 types of aircraft.

It is also the most diversified MRO in the country, with a pan-India presence in 27 locations with close to 1,500 employees. It also provides commercial aircraft asset management services, avionics, cabin and interior solutions, 3D printing, and aircraft refinishing services apart from MRO-related offerings.