MAX KINGSLEY-JONES / PARIS
ATR is confident that the recent sales spurt which saw 13 new orders taken in the last six weeks signals a turnaround in its fortunes after a dismal 2003.
"It was a very difficult year for ATR," says the Alenia/EADS joint venture's chief executive, Jean-Michel Léonard. "Traffic growth was stagnant and we were badly affected by the demise of ACES Colombia, Air Littoral and Khailfa Airways." The poor market conditions also saw a "systematic postponement" of expected fleet decisions, he adds.
ATR had expected to deliver around 18 aircraft in 2003 and to book orders for a similar number, but achieved just half these targets, completing just nine deliveries and securing 10 new orders. Recent successes underline ATR's view that it is in for a better 2004, with an order in December from CSA Czech Airlines for seven ATR 72s, and a deal last week from Binter Canarias for six ATR 72s.
For 2004, Léonard expects deliveries to increase to around 15 aircraft and orders to 15-20 aircraft, with a further increase to around 18 deliveries forecast in 2005.
"In March, we had to decide on a drastic re-evaluation of our production plan," he says. This saw changes introduced into ATR's production process to improve its flexibility, resulting in an "important improvement" in the cost structure and lowering the break-even annual production rate from 18 aircraft to 12, says Léonard.
Despite the poor year for new sales, Léonard says there was a strong uptake in used aircraft, with a total of 43 secondhand aircraft being placed.
This market remains strong, with 30-35 transactions expected this year, he says.
The demise of Algeria's Khalifa was partially offset by ATR's ability to quickly place six of its ATR 72s with Air Algérie. The manufacturer is hopeful that the Algerian flag carrier will also take over Khalifa's five orders, several of which are built.
Despite the troubles last year, Léonard says that the company achieved "a positive result" last year on a turn-over of around $400 million. Like other European companies, ATR is suffering from the strength of the euro against the dollar, with 90% of its revenue and a third of its costs in the US currency. However. unlike Airbus, it sees few further opportunities to cut costs.
Source: Flight International
