New Products, Strategies Drive ATR’s Record Services Sales

Turboprop aircraft deliveries were falling before the pandemic and are not expected to reach pre-2020 levels at any time in the next decade, Aviation Week Network’s Commercial Fleet & MRO Forecast 2024 shows. The data shows that deliveries dropped to 93 in 2019 from 133 in 2015, and are estimated at 64 this year. They hit bottom in 2020, at just 31 units.

Even as its new sales slow, the dominant manufacturer in the market, Toulouse-based ATR, is enjoying record aftermarket business. Services revenues reached more than $400 million—about a third of the group’s total revenue—last year.

ATR’s Head of Customer Services Laurent Caballe, tells Inside MRO that this was due to several factors. Among them: support the manufacturer extended to customers during the pandemic; its customization and flexibility; and the launch of new products such as its E-Power reliability engineering service.

“Looking ahead, we anticipate further growth in line with the expanding fleet,” he says. “We have successfully regained many customers and established ourselves as leaders in the market.”

Caballe notes that about 70% of ATR’s 2023 services sales came from materials provision such as spares distribution and its flight-hour-based Global Maintenance Agreement (GMA). Roughly a third of the ATR fleet—almost 400 aircraft—is covered by a GMA.

These services are popular because of their adaptability, Caballe says. For example, he says that airlines can mitigate parts price inflation by agreeing to fixed price deals for spares, allowing them to plan in advance for heavy maintenance expenditure.

According to Caballe, aftermarket revenues from an ATR aircraft tend to peak at about 12 years of age, when operators invest most in maintenance and upgrades. Aviation Week data shows that of the global fleet of 1,100 ATR 42 and 72 turboprops, 210 are 10-12 years old and 255 are 7-9 years old.

“Intuitively, one might assume that the fleet is aging slightly since we are delivering fewer new aircraft as we had to slow down our production pace due to COVID," he says. "However, the reality is that the average age of the ATR fleet is stable since the early 2000s, when our production pace started to increase, and the impact of the new aircraft produced on the fleet average age has been balanced by the number of aircraft removed from operations."

Caballe adds that ATR does not expect any significant change in the average age of the ATR fleet going forward, “nor any significant impact on our aftermarket activities.”

NEW PRODUCTS

ATR’s aftermarket revenue growth has been supported by new services such as E-Power. Caballe says this new type of GMA “enables us to provide tailored recommendations to our customers to enhance the performance of their fleet.

"These recommendations can be related to upgrades, troubleshooting, processes and documentation [and] analysis of parts removal practices," he continues. "The service includes on-site tailored training and the appointment of a dedicated engineering focal point directly interacting with the airline’s technical departments.”

Finnair was an early customer for the service. ATR says E-Power helped the Finnish flag carrier record a 25% improvement in reliability over three years.

The airline backs this up.

“We have a spare part pool agreement with ATR, and we believe it gives us better component reliability due to a good OEM network,” says Petteri Hakkarainen, head of line maintenance for Finnair, which performs ATR line maintenance in-house but outsources heavy checks. “We go more deeply into technical details whenever troubleshooting. Also, fault isolation manuals are updated more easily when needed. Special training is also available when needed," Hakkarainen adds.

Another priority for ATR is streamlining its customers’ procurement processes. Improved digital offerings are playing a large role. About 70% of its spares and GMA services are now booked through its e-GMA and e-Spares platforms, and the OEM is also working toward integration of its IT systems with those of its suppliers and customers.

ATR is also working with MRO software specialist Swiss-AS to digitalize its maintenance management. “Our Digital Maintenance Documentation package service consists [of] providing customers with raw data of line maintenance publications in XML format, to be uploaded into the airline’s maintenance information system via AMOS, the comprehensive solution designed by Swiss-AS,” says Caballe.

Air Algerie is the launch customer for this service. Caballe says the carrier will from shorter revision processes, quicker publication distribution, more consistent information, and easier preparation for maintenance checks.

SUPPLY CHAIN

Although ATR has faced similar supply chain challenges as the rest of the industry, Caballe says the company’s mitigation efforts have enabled it to offer customers better parts availability than competitors.

“The lingering supply chain issues have indeed had and continue to have a significant impact on the performance of our aftermarket services, particularly in terms of turnaround times and spare parts supply for our customers,” notes Caballe.

To address these challenges, which have doubled and in some cases tripled turnaround times, ATR has taken various measures, including boosting inventory levels and increasing supplier oversight.

“One measure we have taken is to increase our level of speculation with suppliers," Caballe says. "This means we have increased our orders, providing suppliers with visibility and encouraging them to invest in their industrial capabilities.

“Additionally, we have expanded our GMA pool to ensure we have an increased stock of spare parts available,” he adds. “Due to the longer repair times, it is crucial to have a larger inventory to meet customer demands promptly. In some cases, we have also reallocated parts originally intended [for] our final assembly line to prioritize customers who are facing aircraft on ground situations. This ensures that critical spare parts are available to address urgent customer needs.”

ATR is stepping up its teardown activities to recover serviceable parts, adapting its aircraft to be compatible with substitute components and has worked toward extending the maintenance intervals of expensive life-limited parts such as propeller hubs and landing gears.

AFTERMARKET DEVELOPMENT

Plans to support its aftermarket business going forward include developing and expanding its flight operations and fleet technical management (FTM) services, ATR says.

Within flight operations, flight data monitoring aims to enhance safety and operational efficiency through the continuous monitoring of various recorded parameters during routine flights. The data collected is then analyzed by the OEM to identify patterns, trends or deviations from standard operating procedures to provide operational recommendations addressing the identified areas of improvement. These areas might include flight crew training improvement, operational cost reductions through fuel or navigation efficiency, or even maintenance cost reduction.

On the technical side, Caballe sees FTM as “a unique opportunity to help our customers optimize maintenance schedules, reduce maintenance costs and minimize aircraft downtime, by efficiently planning maintenance activities and anticipating potential failures based on historical data.”

That said, Caballe also notes that real-time predictive maintenance's benefits may be more limited for ATR applications than on other platforms, such as long-haul aircraft. Longer flight segments provide more time for data to analyzed and then acted upon with proactive repairs on arrival.

“We believe that the short-haul nature of ATR flights, first, and the utilization of the aircraft itself—around 4-5 flight hours a day on average—make it a more distant concept for our market.”