Air India is planning to buy out the government-owned maintenance, repair and overhaul (MRO) company AI Engineering Services Limited (AIESL) and could partner with Lufthansa Technik and engineering unit of Air France KLM.
Prior to privatisation, AIESL was Air India’s engineering arm. The MRO remained with Indian Government along with several other airline subsidiaries in a special purpose vehicle set up in 2019 for holding non-core assets and debt of Air India called Air India Assets Holding Ltd (AIAHL)
As of now Air India continues to outsource its aircraft MRO work to AIESL at the same time developing its in-house engineering solutions for the airline’s expanding fleet needs.
The airline, however, is keen on acquiring AIESL once the government puts it up for sale. Speaking to Economic Times, an Air India executive said: “Around 90% of Air India’s engineering needs are fulfilled by AIESL, and acquiring the MRO company as part of developing Air India’s in-house engineering capabilities seems like a good idea.”
Meanwhile, Air India is looking to partner with Lufthansa Technik and Air France-KLM’s engineering department to bid for AIESL. Singapore Airlines will also join the consortium through SIA Engineering Company Limited, as per sources.