India’s national carrier Air India on Thursday signed an agreement with GE Aviation, a unit of General Electric Co. (GE), to set up a $90 million facility to maintain aircraft engines.

Under GE Branded Services Agreement (GBSA), GE Aviation will provide technical support while Air India will offer maintenance, repair and overhaul (MRO) services for the GEnx-1B engine.

The facility will come up at Air India MRO in Mumbai and with an investment of $90 million, of which GE will contribute $20 million, Air India chairman and managing director Arvind Jadhav told reporters at India Aviation 2010 here.

Under the GBSA, Air India will be licensed to perform maintenance and overhaul work on the GEnx-1B engine. GE will provide Air India with assistance on overhaul workscoping and component repair licences, comprehensive material support and training.

The GEnx-1B will power Boeing’s 787 aircraft. Air India has 27 GEnx-1B powered Boeing 787 aircraft ordered.

Nalin Jain, country director, GE Aviation said it would be GE’s second such MRO facility in the world.

The facility will not only cater to all widebody planes of Air India, but also carry out third party work for customers across the globe.

Mr. Jadhav said it would further advance Air India’s plans to become a global MRO service provider. He said if such engineering works were taken up at all places like Mumbai, Delhi, Kolkata and Hyderabad, Air India could earn Rs.3,000 crore to Rs.4,000 crore per year in two to three years.

Air India has been overhauling jet engines for more than four decades. During this time, it has handled various jet engine models.

“Air India envisages a state-of-the-art facility catering to GE90 and GEnx engines, including a new engine test facility. Our strong collaboration with GE will enhance the visibility of the facility in the world and will result in India becoming one of the major engine MRO players,” Mr. Jadhav said.

With about 1,300 engines sold to date, the GEnx is the fastest-selling engine in GE’s history. Based on the proven architecture of the GE90, the GEnx engine will succeed GE’s CF6 engine.

Compared to the CF6 engine, the GEnx engine will offer 15 percent improved fuel efficiency, which translates to 15 percent less CO2.