Airbus Group has dismissed speculation that it is less enthusiastic than partner Finmeccanica about the future of their ATR regional turboprops joint venture, but concedes that the pair disagree about the timing for launch of a programme to develop a larger, 90-seat aircraft.
Speaking in Toulouse as the group detailed its 2013 financial performance, chief strategy officer Marwan Lahoud said that with ATR's existing product range – particularly the 70-seat ATR 72 – enjoying dominant market share after years of poor to middling financial performance, "it is a great time of success for ATR... at last".
Now, he says, it is time to profit from ATR's momentum without introducing a new programme challenge that would "dilute" the financial benefits flowing from rising sales and deliveries: "We want to enjoy that success."
There is not, he stresses, "any divergence" between Airbus and Finmeccanica except for timing. The partners are known to be discussing the structure of the joint venture but, says Lahoud, those discussions are about its legal framework and not about Airbus's continuing involvement. ATR, says Lahoud, is a GIE entity (groupement d'interet economique) dating to 1980 – the oldest form of company structure employed by the group.
ATR's fortunes have transformed over a decade that have seen it go from a candidate for termination to leader of the market for 70-seat turboprops. As fuel prices have risen, the operating economics of turboprops have led airlines to turn to them for many low-capacity short-haul routes, ditching small regional jets.
Operators in Asia-Pacific have been increasingly eager to expand their turboprop fleets, and ATR commands some 85% of the market in that economically fast-growing region. Customer calls for a larger aircraft of about 90 seats have become strident.
However, that larger aircraft would be not a stretch of the ATR 72 but a substantially new machine, which ATR chief executive Filippo Bangnato says would support the company for the next 30 years. Lahoud suggests that Airbus is in no hurry to kick off that programme, given the scale of investment that would be required to realise it.
Meanwhile, ATR's overriding concern is to ramp up production. Earlier this year, Bagnato said that while 2013's 74 deliveries was a record high, the company fell short of its 80-aircraft objective. For 2014, he said, "we must – not should – deliver a minimum of 80 aircraft", adding that in both 2015 and 2016 "we must go beyond 90" or risk losing out on orders. "The most important asset of ATR is the confidence of the customer," says Bagnato.
In 2013, ATR took 195 orders – 89 firm (up 20% on 2012) and 106 options – to hold its backlog at a historical high of 221. Turnover grew 13% to a record $1.63 billion – up 30% over three years – and profit was about €150 million, representing a 9% return on sales, more than double the 4% earned by Airbus commercial. Turnover in 2014 is expected to reach €1.8 billion.
The contrast with rival Bombardier is stark. ATR's 89 firm sales accounted for 74% of 2013's commercial turboprop orders, and the airframer has commanded a 60% share over the past 10 years. Bombardier, meanwhile, took in just 17 orders for the Q400, down from 50 in 2012.