Adani Group to acquire MRO Air Works

The 71-year old aviation company services IndiGo, GoAir and Vistara, in addition to over a dozen foreign airlines including Lufthansa, Turkish Airlines, FlyDubai, Etihad, and Virgin Atlantic. It has also developed operational capabilities within the country for key defence and aerospace platforms including maintenance checks of the Indian Navy’s P-8I long-range maritime patrol aircraft and MRO on the landing gear of the Indian Air Force’s 737 VVIP aircraft.

Air Works Group, with a pan-India presence across 27 cities, competes with 50 standalone Indian MRO players including Government-run AI Engineering Services Ltd and GMR Aero Technic. According to filings with the Ministry of Corporate Affairs, the largest shareholder in Air Works Group as of March 31, 2021 was GTI Capital Group, an India-focused investment fund, with 25.75% share. This was followed by a 23.24% stake held by Punj Lloyd Aviation, a subsidiary of the now bankrupt Punj Lloyd Ltd. Around 15% of the company is currently held by the Menon family, which founded Air Works in 1951.

Billionaire Gautam Adani-run Adani Group operates the country’s second largest airport in Mumbai, in addition to airports in Ahmedabad, Lucknow, Thiruvananthapuram, Jaipur, Guwahati and Mangaluru.

In March 2020, the GST rate on domestic MRO services was brought down from 18% to 5% with full input-tax credit — a move that, the MRO industry said, was a huge relief. Because of the cost disadvantage in India due to higher taxes, domestic airlines used to send their aircraft to countries such as Sri Lanka, China, Singapore and the UAE to have them serviced.