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First -600 Series customers as ATR reports record turnover

24th January 2009 - 11:25 GMT | by The Shephard News Team


ATR has announced that its annual turnover for 2008 was a record for the company. The figure of $1.3 billion is an increase of approximately 140% over the 2005 figure. Of the sum, 70% came from new aircraft, 18% from customer support and 12% from asset management.

The manufacturer received 42 new orders plus 14 options in 2008. Among those ordering were five new customers – Lion Air (Indonesia), Buquebus (Uruguay), Golden Air (Sweden), Belle Air (Albania) and Halcyonair (Cabo Verde). Having only announced eight aircraft sales by June, ATR CEO Stéphane Mayer admitted, “It wasn’t obvious that [the final figure] would be the case.”

Mayer admitted that there had also been cancellations and postponements last year. “There were 13 cancellations, which is less than 10% of the backlog. Looking at it from an optimistic, ‘glass half-full’ view, I think of it as having more than 90% of our customers confirmed. However, it is impossible to say we won’t have more cancellations.”

The backlog at 31 December 2008 stood at 169 aircraft amongst which are 39 orders for the new -600 Series comprising 23 72-600s for Kingfisher Airlines, ten 72-600s to Alenia for the Turkish Navy, three 42-600s and two 72-600s for Air Tahiti and one 42-600 for Air Caraïbes. The former pair are migrations from orders for 72-500s while the latter pair are new orders. “This shows that the migration that was expected is now becoming a reality,” Mayer noted.

The first -600 delivery will be in early 2011. According to head of sales, John Moore, no first recipient has been set “as other orders may be taken”.

ATR delivered 55 aircraft in 2008, a 25% increase on 2007 and 130% up on 2006’s delivery figure of 24. In 2009 the company will deliver more than 60 aircraft. “We will stabilise the delivery rate,” Mayer explained. “We’ve had a steep climb in the rate, but now we’ll remain constant at the rate we reached at the end of 2008, around six per month.”

The manufacturer is aiming for a 2009 turnover above $1.4 billion. “This may seem ambitious in the current climate, but I believe it can be reached,” Mayer commented. “Whatever the oil price is, a turboprop is always the right aircraft for most regional routes. It’s a natural hedging instrument.

“The higher the fuel cost goes, the greater the economic margin for an ATR over the competition,” he continued. “Having said that, when fuel was around $140 a barrel, it was difficult for any airline, even those with ATRs. But if the price levels at $80-$100 per barrel, as many analysts expect, ATR operators will have a definite advantage over those using competing turboprops or regional jets.”

Activity in the market is still strong, Mayer said, though down on last year. “All the current campaigns would add up to about 400 aircraft, which is about 100 down on this time last year.”

John Moore noted that quite a few decisions have been delayed by the economic downturn. “The US airlines are still stabilising, but the potential there is good. It’s just a question of timing,” he commented.

The Chinese market is still important to ATR, said Mayer. “It will be a huge market as the country’s economy grows. To be successful there, a manufacturer must have Chinese content on the aircraft. At present the current share for us does not appear to be enough, so we are looking at how we might increase it.

“One option is to have an assembly line in China,” Mayer added. “That is under discussion, but it would not mean us closing our Toulouse line.”

ATR predicts that 2,900 new turboprops will be required over the next 20 years with around 30% of the demand being for aircraft with 90 seats or more. “Of course, there is no product in this segment right now, which is why we are working hard on an aircraft to meet the demand, just as our competitors are,” Mayer remarked before admitting, “It is unlikely, given the financial situation, that a decision to launch a programme will be made this year.”

The used aircraft market has also been active, reported SVP commercial Jacques Desbarats. “We placed 13 aircraft in 2008, all of which were sold, and had six lease extensions. Our policy now is to sell aircraft and reduce the portfolio.”

Desbarats added that 12 aircraft are due to come off lease in 2009 plus two scheduled buybacks. “If any of the operators of those leased aircraft want to extend, we will do so. But we are also looking to sell the aircraft, so there is the possibility that some will be sold, with the lease attached, to an asset management company,” he noted.

Bernie Baldwin, editor, Low-Fare & Regional Airlines/

The Shephard News Team


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