January 27, 2014
Credit: ATR Concept
In the past three years, Avions de Transport Regional (ATR), the Toulouse-based Franco-Italian regional aircraft manufacturer, has tried hard to obtain shareholder approval to launch a 90-seat twin-turboprop to complement its current range of 44- and 72-seat aircraft. ATR is jointly owned by Finmeccanica and the Airbus Group (formerly EADS), as equal partners. This arrangement can and has impeded the decision-making process.
Finmeccanica, Alenia Aermacchi's parent, seeks to acquire more commercial business and it supports the envisioned all-new twin-turboprop, expected to be called ATR 92. However, top executives at the Airbus Group have rejected what they are calling an overzealous approach. “I don't understand such eagerness,” Airbus Chief Executive Fabrice Bregier said earlier this month. Late last year, Tom Enders, the Airbus Group's chairman/CEO, seemed to rank the project low on his list of priorities, creating bitter disappointment at ATR.
According to the turboprop manufacturer's in-house research team, an estimated 1,100 90-seat turboprops will enter service in the next 20 years and no more than three main competitors are expected to share the market. Archrival Bombardier will most likely launch an increased-capacity derivative of its Q400 and China could try hard to export the newly launched MA700 that was developed by Avic and is scheduled to enter service in 2019. The Chinese offering is a 78-80-seat aircraft, but a shortened-fuselage version is planned and a stretched variant is being considered. The latter could prove to be competition for the ATR 92, should either come to fruition.
ATR Chief Executive Filippo Bagnato strongly believes the time is ripe to launch a new program. In the last few years, the turboprop maker concluded orders for a record number of ATR 72s and is gradually increasing production to about 80 aircraft per year. Profitability has been restored, following several weak years. Company executives say the required investment to develop a new aircraft is a relatively modest $1.5-2 billion. However, Enders, Bregier and other Airbus Group leaders remain unconvinced, underscoring again that it is difficult to get major commercial transport manufacturers interested in “small” aircraft. The ATR 72 lists for $24.1 million while the catalogue price of the A320, Airbus's best-seller, is $102.8 million. List price for the A350 is $260.9 million and the A380 mega-transport goes for $414.4 million.
In other words, the Airbus Group, at least in its role as ATR co-owner, could be too big. However, the parent company rejects such criticisms. Previously, Airbus claimed its design office was overloaded by the concurrence of several types in the system—the A380 in its final development phase, the A350 in its initial (and demanding) design phase and the long-delayed A400M military airlifter, all of which involved thousands of engineers. But this is no longer true. The A380's wing problems have been resolved, the A350 is entering the production phase (although derivatives have not been frozen as yet), and the A400M is entering into service.
Perhaps launching a new turboprop is too much of a burden for relatively modest results. History does not favor ATR. For example, when a British partner (the British Aircraft Corp. BAE Systems' predecessor) temporarily joined the multi-national consortium that preceded EADS, it was denied a request to produce a regional twinjet in order to protect the BAe-146. So despite the emerging “jetmania” of that time, ATR remained confined to the turboprop market.
ATR executives, including Bagnato, are studiously avoiding a public airing of the response to their request. But the current freeze shows, again, how difficult European cross-border industrial collaboration can be, even without political interference or the negative effects of economic patriotism. It will be interesting to see if Finmeccanica can make a case for buying the Airbus Group's 50% stake in ATR to become the airframer's sole owner. For now though, this remains a politically awkward question.