Aircraft and Equipment Channel

ATW Daily News

Rising demand for turboprops translates to big year for ATR

Tuesday January 24, 2006

ATR of France logged firm orders for 90 new aircraft--17 42-500s and 73 72-500s--plus 26 options in 2005 against only 12 firm orders in 2004. Revenues amounted to $542 million, an increase of 15% compared to 2004, prompting CEO Filippo Bagnato to declare, "2005 was our best year since 1989" during a Paris press conference yesterday.

Bagnato said there were three reasons for the "strong revival" of turboprop aircraft: The soaring price of crude oil, the growth of regional markets and airlines' efforts to reduce costs. He added he is confident 2005 will not be a one-off peak year, but he told ATWOnline he preferred not to predict how many aircraft the company will sell in 2006. Surveys show a need for approximately 60-70 aircraft per year in the 50/70-seat range for the next 10 years and ATR is eyeing a 50% market share.

Air Deccan was the company's biggest customer last year, ordering 30 72-500s. Kingfisher Airlines signed up for 20. Finncomm Airlines (eight) and Pakistan International Airlines (seven) led the list of 42-500 buyers.

In 2005, ATR delivered 15 aircraft to seven airlines, including four 42-500s to CSA Czech Airlines and three 72-500s to Air Deccan. Aircraft sales accounted for half of its full-year revenue, with support and asset management accounting for the remainder. The production level will increase to 25 this year and to 40 in 2007 and 2008. "This means the ATR revenues will more than double between 2004 and 2007, to around $1 billion," Bagnato said. The airframer has a backlog of 89 aircraft representing a value of about $1.8 billion.

Bagnato also confirmed that the company is moving ahead with its ATR Spares Total Re-engineering project, bringing its logistical support closer to its customers. During the initial stage it will transfer its European distribution center from Toulouse to Paris CDG and its American facility in Washington will relocate to Miami. In April a new spare parts center will open in New Delhi. One in Auckland also is under consideration.

by Cathy Buyck

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