For a company that almost ran out of work a decade ago, the challenge of energising a supply chain to build more than 100 aircraft a year must seem a nice problem to have.
Such has been ATR's recovery from the dark days of the early noughties that it now dominates not just the market for turboprops – where its sole competitor is Bombardier's Q400 – but the entire segment for regional aircraft up to 90 seats; it claims a 47% market share of unit sales in 2014.
On 21 January, the Franco-Italian joint venture – which produces the 72-seat ATR 72-600 and its 42-seat sibling the ATR 42-600 – confirmed 2014 as its best-ever year, with a record 160 firm orders (133 for the ATR 72) and record deliveries of 83 units resulting in a backlog of 280 aircraft, ATR's biggest yet.
Now, the key priority for new chief executive Patrick de Castelbajac is continuing a rapid ramp-up in which the airframer – jointly owned by Airbus Group and Finmeccanica subsidiary Alenia Aermacchi – has increased production 60% over the past five years. Output will rise to 90 aircraft this year and nudge into three figures in 2016.
That may still make it a minnow compared with Toulouse-based neighbour and half-sister Airbus, but it is a remarkable achievement "when you consider where we were a few years back", argued de Castelbajac at ATR's annual media briefing in Paris. In many cases, it means a new relationship with suppliers who were comfortable satisfying an annual output in relatively low double figures but who might be nervous about keeping pace with a production line delivering two aircraft a week.
"When you go up by 60% in five years, it doesn't do it by itself,” says de Castelbajac. "It means supporting some of the weaker parts of our supply chain. Our volumes are much smaller than Airbus and we have to be careful that our suppliers give us the right level of priority. We don't want them saying: 'I will invest everything into Airbus.'"
As output edges towards an expected "plateau" of "100 aircraft or slightly more", ATR is also keen to maintain a book-to-bill ratio of at least one to preserve its three-year backlog. However, after the manufacturer's strong 2014, de Castelbajac expects demand to soften as a result of output constraints and concerns over oil prices after a long period of expensive fuel pushed up demand for thriftier turboprops.
"Our objective this year is to be more conservative after a fantastic year," he says. "We don't have that many aircraft to sell in the short term and there will be worries among airlines over fuel-price volatility. It is normal that we will see things balancing down a bit."
That said, de Castelbajac does not expect the oil price to have a significant negative effect on ATR's sales prospects. In fact, he insists, cheaper fuel will give "airlines more cash to renew their fleets". In addition, he says, turboprops will retain a competitive advantage over jets over a period of time. "When we sell an aircraft, we sell it for 25 years. Does anyone believe the fuel price will be where it is today in 15 or 20 years? The best way to hedge that bet is with our product," he says.
Recalling the short-lived surge in demand for smaller regional jets when the fuel price fell sharply around the turn of the millennium, he adds: "I hope the industry has some memory. A lot of these small jets were grounded when the price began to rise again. When I talk to airlines, they are concerned, but they know our game is a long-term game."
Despite de Castelbajac's insistence that the manufacturer's focus is on adding orders for its existing models and delivering on its commitments, the elephant in any room ATR finds itself in remains the long-mooted 90-seat turboprop. In Paris, the chief executive again sidestepped questions about a possible launch, acknowledging that disagreement between the two shareholders has created an impasse.
"We have two shareholders. One is very willing to go down that route. One is not very willing to go down that route," he says.
Alenia Aermacchi is keen to develop a larger aircraft than the Pratt & Whitney Canada PW127-powered ATR 72, which would require an all-new airframe and a different engine. Airbus Group is sceptical, content to reap the benefits of a 280-strong backlog without investing in a clean-sheet programme. The stalemate has raised questions about the future of the joint venture.
Instead, ATR says it is concentrating on incremental programme improvements. It last year introduced, with P&WC, a higher-thrust PW127 variant, the PW127N, to give the ATR 72 more capability at hot-and-high airports. It also plans to add capacity by developing a 78-seat interior this year. "It is feasible and we are working with the authorities to get there," says de Castelbajac.
Other than that, he leaves the door open for a possible product announcement, perhaps at June's Paris air show. "We have many ideas about ways to improve the aircraft and in the coming months we will be agreeing on what to do," he says.
Source: Flight International
