ATR reports results of record order year

ATR has confirmed that it received 157 firm orders (13 ATR 42s and 144 ATR 72s) plus 79 options in 2011 – its 30th anniversary year – beating its previous record year in 2007 by 40%.

The backlog at 31 December 2011 stood at 224 aircraft worth $5 billion. This figure includes the removal of 38 aircraft which were on order by Kingfisher Airlines. ATR took the decision to enact a cancellation clause in the contract due to problems with pre-delivery payments in December 2011 so that, according to CEO Filippo Bagnato, it could “present a clean backlog sheet to the industry”.

A total of 193 firm orders – turboprop and turbofan – were placed in the 50-90 seat sector during 2011. Of this total 80% were with ATR and 85% were for turboprops. “The backlog for the whole sector now splits 77% turboprop against 23% jet and ATR has 70% of all the backlog in the segment,” Bagnato noted.

Of the 2011 orders the customers for 40 ATR 72-600s and one ATR 42-600 remain unannounced. Bagnato reported that announcements relating to these will be made at the Singapore Air Show.

Among the orders, Bagnato highlighted the deal with Japan’s Uni Air which had been a Bombardier customer. Overall, he added, 56% of orders in 2011 came from existing ATR operators, 23% came from new operators and 21% from lessors.

Revenue in 2011 remained at around $1.3 billion. “We kept deliveries last year the same as 2010 – 54 – so that risk was minimised as we had the -600 Series aircraft to certify,” Bagnato explained. “Now we’re pressing the accelerator to deliver 72 aircraft in 2012, at least 80 in 2013 and at least 85 in 2014. So moving towards we’ll be achieving $2 billion revenue. That production ramp-up will be 60% over the next three years.”

Contributing to the revenue alongside delivery payments and new orders was $270 million in support activity and $80 million in asset management activity. Used aircraft activity has been much lower due to the fact that by the end of 2011, the company’s portfolio was down to 10 aircraft on operating lease, two of which have already been sold. Only one new sale was made last year, with the rest of the revenue coming from the transfer of 19 aircraft titles relating to deals included in the 2010 figures.

On progress with the -600 Series, the first of the 222 aircraft ordered was delivered last August. SO far 10 ATR 72-600s have been delivered to four airlines – Royal Air Maroc Express, Azul, TRIP and Caribbean Airlines – have made more than 3,000 flights. “The dispatch reliability is exceeding 99.7%,” Bagnato commented.

Certification of the ATR 42-600 is now expected in mid Spring, with the first of the model to be delivered in August. This year will also see the last -500 Series delivery plus, on 3 May, the delivery of the 1,000th ATR since the beginning of the programme.

ATR’s forecast sees long-term demand remaining strong, with around 3,100 turboprops required – 500 in the 50-seat category, 1,600 in the 70-seat category and 1,000 in the category of 90-plus seats.

In the near term, following its bumper year, Bagnato believes that in its order outlook for 2012, ATR has to be prudent. “Ideally I’d like to arrive at the end of the year with the same backlog as today. With that I’d be satisfied,” he noted.

Asked whether ATR might end up on its own among turboprop manufacturers following last year’s orders, Bagnato quickly quelled the idea. “No, we won’t be alone even though out main competitor had a bad year. It’s not one year’s figures that change the overall picture,” he remarked. “Also, we must not forget the Chinese – they will arrive in the market [at some point].”

Finally, Bagnato discussed new aircraft programmes, including the potential for the 90-100 seat turboprop, for which most forecasts – including ATR’s own – see a requirement. “Launching a new aeroplane is a tough decision. The aircraft industry is a one-shot industry and one wrong decision can kill a company,” he emphasised, “but I hope that by the end of 2012 we can say something.

“The most valuable asset for ATR is having more than 180 operators. It is the one we have to preserve. It is the engine which will support new investments,” Bagnato declared.

Bernie Baldwin, editor, Low-Fare & Regional Airlines/
Paris, France

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