safran engineering: Safran will set up its largest aero engine MRO in India

Safran Engineering, whose engines will power the largest number of Indian jetliners in the coming years, is setting up its largest maintenance, repair and overhaul (MRO) facility in Hyderabad, its CEO announced on Thursday.

The facility, which will be able to handle up to 300 engine shop visits per year, will also be the largest in India to be set up by a major global engine manufacturer.

The French engine manufacturer will invest up to $200 million in the MRO facility, Olivier Andriès told reporters on the sidelines of an event.

Construction will begin in 2023 and the company hopes to receive its first customer in 2025. Currently, Safran’s largest MRO facilities are at its headquarters in France and Mexico.

CFM Engineering, a joint venture between Safran and the American engineering giant GE, manufactures the CFM56, Leap-1A and Leap-1B which equip most of the Airbus A320s and Boeing 737s in India.

There are currently 600 CFM engines powering 330 passenger planes flown by six airlines in India, said Jean-Paul Alary, director of aircraft engines at Safran. This number will grow to 1,500 over the next few decades, making it the largest engine order book for Indian carriers, including the future Akasa.

The MRO facility will service Leap-1A and Leap-1B engines, which make up the largest part of Indian airlines’ order book.

Global aircraft and engine manufacturers have been reluctant to open repair shops in India due to high taxes that would make the services unattractive to customers. Indian airlines have typically serviced aircraft and engines in markets such as Singapore, Hong Kong and even Colombo.

“We made it clear to the central government in New Delhi that the tax system was a problem. We were unable to establish an MRO business in India because under the old tax regime we were taxed twice. We told the government that if you change this tax system, we will come. And that’s what happened,” Andriès said.

In March, the government reduced the GST on domestic MRO services to 5% from 18%.

Also on Thursday, Safran inaugurated two subsidiaries, Safran Aircraft Engines and Safran Electrical & Power India Pvt.

Safran Aircraft Engines will produce components and parts such as rotating joints for aircraft engines. Safran Electrical & Power India will manufacture harnesses for civil and fighter aircraft.

It also plans to form a joint venture with

() in Bangalore, which will manufacture rigid pipes for aircraft engines, including helicopter engines.

In total, the engine manufacturer aims to invest $350 million in India, Andriès said.

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