India’s domestic aircraft maintenance, repair, and overhaul (MRO) industry is projected to surpass INR 4,500 crore in revenue by fiscal year 2026, marking a 50% growth compared to fiscal year 2024, according to a forecast by rating agency Crisil. This expansion is expected to improve the profitability and credit profiles of industry players.
The rise in demand for MRO services is primarily due to the increasing size of India’s aircraft fleet, which is expected to grow by 20-25% by next year. This growth will be fueled by the addition of new aircraft to Indian carriers’ fleets, as well as older or grounded aircraft resuming operations following repairs. The reduction in Goods and Services Tax (GST) on aircraft components and services will also make domestic MROs more competitive against their international counterparts, helping to ease working capital pressures.
The MRO industry typically offers three main services: line checks before every flight, off-checks every 12-18 months (which require the aircraft to be grounded for 3-4 weeks), and redelivery checks that occur when leases expire every 6-7 years. The growing demand for redelivery checks is expected to see a significant increase next fiscal, with numbers rising up to ten times the levels seen in fiscal 2024.
In fiscal 2024, only 14% of MRO spending by Indian airlines was directed towards domestic MRO providers. However, this share is anticipated to grow as Indian MROs expand their capabilities, although challenges such as hangar capacity, the local supply chain for aviation spare parts, and workforce training will take time to address.
