ATR selling their 1,500 ATR turboprop to Japan Airlines.

By Bjorn Fehrm

Introduction

June 15. 2015, C. Leeham Co: ATR said its turboprop product has broken a barrier that was thought impossible for regional turboprops at its Paris Air Show press briefing today. It was a company telling about being in a strong market and enjoying a market leading position. ATR sold its 1500th aircraft to Japan Airlines Commuter (JAC),  the regional daughter of Japan Airlines. JAC signed for eight ATR 42 to replace the Saab 340 fleet. JAC also holds options for a further 15 aircraft. The order was the first for ATR aircraft to Japan.

ATR, which is owned 50:50 by Airbus and Finmeccanica of Italy with headquarters in Toulouse, is dominating the under 90 seat worldwide turboprop market. ATR said that it will unveil business for 46 aircraft during the air show with 35 options as it continues to dominate the world market for turboprops which seats up to 90 passengers. ATR claims it has controlled 77% of the market since 2010 to date and that its customer base during that time was 51 customers versus nearest competitor’s 24.

Key to success

ATR’s CEO, Patrick de Castelbajac, said the key to ATR’s success is relatively simple aircraft which therefore achieves a very high reliability and cost-effectiveness. He mentioned that the airline BinterCanarias, which bought six ATR 72-600s, had achieved 99:9% operational reliability during its first year of operation. Paired with an attractive purchase price and a well-working worldwide service network, these are the pillars for the recent success for ATR.

To continue to stay at the forefront of customers requirements, ATR has done several developments:

  • It developed at ATR 72 cabin, which can take 78 passengers by virtue of slim line seats stacked at 28’’ pitch. To achieve this density, ATR has changed the forward storage compartment.
  • ATR has also developed a flexible combi version where the forward seven rows can be replaced by a cargo section. Dependant on route demands, the dividing line between cargo and seat rows can be changed to suit the seasonal demand picture for the airline. Launch customer for this configuration is Airlines PNG.

To enhance the operation reliability of the aircraft further, ATR revealed that it is developing improved avionics to enable the aircraft to operate in more adverse weather. The first is a new type of visions system in the shape of a head mounted display in the form of a visor which renders heads up display symbology with flight path vector information into the pilots line of sight. This works as a heads up display without the complexity of installing such a device in aircraft’s cockpit. Through line of sight presentation of ILS, LPV and RNAV landing information, the minima for such procedures can be reduced by 50%. ATR is also working on a laser based wind shear detection system for its turboprops.

Expansion for success

ATR is in the lucky position, according to de Castelbajac, to have continued sales success on all five continents. The only major country where one is not presently present is mainline China. To change this position, ATR is opening a representation office in China this year. In addition to sales activities the service and support network is continually expanded with a new spare parts warehouse being established in Brazil during 2015.

The only expansion that seems to evade ATR is the grant from the mother companies to expand the product line with a new development for the 100 seat turboprop market. De Castelbajac said the mother Airbus does not see the time being right for such an expansions right now.

10 Comments on “ATR selling their 1,500 ATR turboprop to Japan Airlines.

  1. I know Bombardier have their hands full right now with CSeries, but would a “new” wing for the Dash-8 help sales?

    [By new, I really mean reprofiled for a lower cruise Mach number and thus better fuel efficiency. So the structural loads would remain unchanged meaning no need to recertify.]

    Oh and chapeau to ATR – they’re going great guns. Now if only Airbus would quit being a$$hol€s and let them build a >100 seater. [I find it strange they haven’t told ATR – “Build a new family, 100, 115 and 130 seats” – which would then erode the regional jet/small narrowbody market share of the Ejets and CSeries from beneath.]

    • Why does a Dash-8 wing have to be reprofiled for a lower cruise speed.

      Its the called Q 400 now, and when the original Dash8-400 came out in 1999 it had cruise speed 60-80 kts slower. the Q400 has PW150 engines which are substantially more powerful.
      Higher cruise speeds will allow more short sectors to be flown in a day.

      • Apparently ATR are selling on the strength of their fuel burn – with airlines accepting the lower cruise speeds.

  2. “Quit being a$$hol€s”? Very nice for you to make the decision for them regarding a multi-billion euro investment.

    The point that you miss is that ATR is not wholly owned by Airbus but a JV, and therefore there is far more risk to Airbus when it cannot fully control the development. In addition, the relative gains are small when you look at the available market.

    • As far as I understand, Finnmeccania are in support of a new larger turboprop. It is Airbus that is putting the brakes on it.

      If there is a business case to be explored for the A380neo, there is certainly a business case to be explored for a 100+ seat turboprop.

      Yet Airbus are not interested.

      Its not a logical stance from the point of view of being an ATR shareholder.
      It may be a logical stance from being a quasi-competitor.

      • I suspect Airbus might have plans of their own for 100+ seat turboprops. Plans which might not include letting a partner have half the profits.

        • Indeed.

          Which IMO then begs the question – where are the EU’s anti-competitive crowd now?

          They wouldn’t be elsewhere because Airbus are seen as a symbol of EU cooperation would they? [/cynical]

      • That Airbus is examining the business case for A380neo is a key point – any spare money that Airbus has it would prefer to invest in it’s own products.

        Airbus’ stance is perfectly logical when you consider it’s target market – i.e. large jets and not small turboprops.

        In addition, Airbus’ experience has been that Finnmeccania can be a very challenging partner to work with.

        • ATR is a separate company with all that entails.

          – Unless ATR are issuing shares to fund development, they will not be getting the money from Airbus’ pocket.

          – Airbus’ target market is irrelevant, they are in the board room of ATR, it would be ATR engineers designing an aircraft to be manufactured in ATR plants. Airbus’ resources would not be impacted.

          – Airbus would not be working with Finnmeccania in building the aircraft. Theoretically ATR *might* subcontract some work out to Airbus and Finnmeccania that requires interfacing between the two, but on an engineering level thats it. If the two companies cannot work with each other in the ATR boardroom, then you’d have expected one to divulge their shares.

  3. You are failing to recognise that ATR is a Joint Venture; it does not have publically offered shares, and would probably require input of money from Airbus, as one of the co-owners, to fund any significant new development. Plus, in effect, Airbus does use it’s own resources for the benefits of ATR; the FAL for ATR is on the Airbus Saint-Martin site in Toulouse.

    All of which is by the bye. As one of the two co-owners of the ATR JV, it is entirely Airbus’ perrogative to block such a proposal if it does not agree with it – and I highly doubt that this decision is taken on anything other than what Airbus regards as good business sense, as opposed to what you seem to suugest is some emotional motive.

    If the business case really is that solid, there is nothing to stop Finnmeccania offering to buy out the Airbus ownership and fund a new development themselves.

Leave a Reply

Your email address will not be published.