City Airport Awaits Land Acquisition to Start Overhaul Unit

Published: 29th December 2015 02:47 AM  |   Last Updated: 29th December 2015 02:47 AM   |  A+A-

CHENNAI: Chennai Airport is on the verge of acquiring 50 acres of land adjoining the international airport at Meenambakkam to be used for   maintenance repair and overhaul (MRO) of aircraft. The acquisition of land is part of a larger goal to develop India into an MRO hub in Asia.

Chennai Airport Authority of India (AAI)director Deepak Shastri told Express that Airport Authority of India’s proposed acquisition of the land is necessary as MRO business of Indian carriers alone is estimated to be around ` 5,000 crore of which 90 per cent is currently spent outside India.

Shastri said that once the MRO facility has been developed, it will become self-sufficient.

AAI has sent its recommendations pertaining to the Draft National Civil Aviation Policy which is likely to be unveiled in 2016.

“We have sent in our suggestions,” said Shastri while refusing to divulge anything further.

The policy suggests a set of measures to make India a MRO hub. These include the waiver of service tax on output services of MRO, aircraft maintenace tools and tool-kits to be exempt from customs duty besides allowing foreign aircraft to stay in India for the maximum period. The state government is also coming up with its own aviation policy. It is learnt that the state is planning to create an amenable investment climate and is consulting with the Union government to frame regulatory measures and a taxation regime conducive for the growth of aviation industry that will cover MRO service and defence supplies.

The new aviation policy could make air travel cheaper as the Ministry of Civil Aviation has targeted all inclusive airfares not exceeding `2,500 per passenger indexed to inflation for a one-hour flight on the regional connectivity scheme.

The draft aviation policy which is likely to be implemented in April 2016 has suggested that the regional connectivity scheme will be made operational only in those states which will reduce value added tax on aviation turbine fuel.

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