ATR Plans to Survive

"We plan not only to survive, but to live." Those are the fighting words of Paolo Revelli Beaumont, VP for commercial sales at ATR. And Asia is crucial to the aspirations of one of the western world's only two manufacturers of regional turboprop airliners.

Just two operators in the region, Vietnam Airlines and Jet Airways (India), each took delivery of three ATRs last year to account for a quarter of ATRs sales of 25 new aircraft.

But then the new, leaner ATR (it reorganized as a commercial company in mid-2001 from a marketing cooperation between EADS-Aerospatiale and Alenia) needs only 18 sales a year to break even.

"That was a reasonably good year in terms of new aircraft," Beaumont told Show News. "We are targeting Asia for at least a quarter of our sales over the next three years. It really is a crucial region for us."

In addition to the 25 new aircraft, ATR sold 23 used airliners last year.

ATR has a fleet of 71 airliners in service with 13 operators in Asia-Pacific, including India, and it expects it to grow.

"Our analysis shows traffic growth will be slightly above average here," said Beaumont. "At the same time, 75% of the regional routes are under 250 nmi and thus ideally suited for turboprop aircraft." It is generally accepted that turboprops enjoy an advantage in operating costs of up to 20% over regional jets on routes shorter than 300 to 350 nmi.

"The area is very underdeveloped in terms of regional service, so we see a great potential," he added.
Beaumont believes annual sales of 25 aircraft will keep ATR reasonably profitable. He sees that target as readily attainable for several reasons, including a diversified worldwide base of 100 customers, many of whom add ATRs to their fleets as they expand.

"This market cannot accept $18-20 million regional jets," he said. "They think turboprops are ideal, and cheaper to operate." The 70-passenger ATR 72 lists for around $17.1 million, and the 43-passenger ATR 42-500 for $14.2 million.

Both models have held their value well in the used market, proving a double-edged sword in that until now they have been too expensive for cargo operators who typically fly just one mission a day.
However, Beaumont noted a high rate of growth in air cargo points to a need to replace 450 aircraft in the 10-ton category in the next 20 years, and an additional 400 aircraft will be needed. "That's 850 aircraft, or 40 a year. We should be able to supply between 10 and 20 a year, mostly used aircraft," he said.

This demand for used aircraft will underpin the market for new ATRs and help achieve that 25 a year in new sales, Beaumont added.

The ATR is the only aircraft in its class with a fuselage that can take standard LD3 containers. ATR has developed a wide cargo door for the ATR 72, and the first, modified by Aeronavale, has been sold to launch customer Farnair of Switzerland. There are currently eight standard-door ATR 72s in cargo operation. To date 29 ATRs are operated in cargo configuration.

As cargo operators become busier, they can add a second trip a day and justify the expense of a used ATR, or add an ATR instead of double-tripping with smaller aircraft. Just last month ATR sold two used ATR 42s to an African cargo operator whose fleet of 19 Cessna Caravans each average 250-260 hours a month.

Since the beginning of the program ATR has sold 662 aircraft (370 ATR 42s and 292 ATR 72s) and delivered 633 (364 ATR 42s and 269 ATR 72s).

It is showing an ATR 72 in Bangkok Airways livery here at Asian Aerospace.

-John Morris