ANALYSIS: the ATR 72-500 aircraft report

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The ATR 72 is a twin-engine turboprop that can seat between 68 and 74 passengers in a single-class configuration.

Avions Transport Regional (ATR) launched its 70-seater programme, which is a stretched version of the ATR 42, in 1986 and delivered the first ATR 72-200 aircraft in 1989.

The ATR 72-212A, the -500 version, was certified in January 1997. It incorporates new features such as increased-volume overhead bins, and upgrades applied first on the 50-seat ATR 42-500 model.

The upgraded version is equipped with more powerful engines, the Pratt & Whitney PW127F or PW127M variants. The engines use Hamilton Standard/Ratier-Figeac 568F six-blade propellers with electronic control and a noise suppression system.

The ATR 72-500 can take off from a runway just 4,015ft in length, and carry a full load of passengers and baggage over a distance of 820 miles under ISA sea-level conditions.

Other improvements include new landing gears, wings and brakes, higher maximum weights and superior performance, as well as greater automation of power management to ease pilot workload.

The ATR 72-500 has 90% commonality with the ATR 42-500, sharing the same fuselage cross-section, using the basic systems, and outfitted with a common cockpit that allows for pilot cross-crew qualification and the simplification of spare stocks.

Flightglobal’s Ascend Online database says the PW127M is the most popular engine powering the ATR 72-500 model with 187 units or 52.5% of the total fleet.

The PW127F engine powers 163 aircraft, or 45.8% of the fleet while the six Air Algérie aircraft are equipped with the PW127E engine.


The ATR 72-500 programme delivered 365 units to operators, and Wings Abadi handed over the final aircraft at the end of 2012.

There are 312 ATR 72-500s in service, according to Flightglobal’s Ascend Online database. Another 44 units are in storage.

Asia-Pacific accounts for 153 aircraft or 49% of the active fleet. In 2009, there were 119 aircraft flying in Asia Pacific region, up from 64 units in 2007.

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Europe represents 27.5% of the in-service share with 86 units in operation. In 2009, there were 72 aircraft in operation compared with 47 in 2007.

Africa and the Middle East have 45 units in service compared with 33 in 2009.

Latin America is home to 28 ATR 72-500s, while no aircraft operate in North America.

According to Ascend, an estimated 252 aircraft are configured with 68 to 74 seats.

The most popular variants are the 72-seat configuration (93 aircraft) and the 68-seat version (91 units).

Ascend notes 73 aircraft are equipped with 66 seats, 12 units have 64 seats while another 14 aircraft have 62 seats.

The 44 units in storage include 20 ex-Kingfisher Airlines aircraft that were built between 2005 and 2008, says Ascend. The other aircraft have built years that range from 1997 to 2011. Three aircraft are 1997-built, two were manufactured in 1998, three in 1999, two in 2000, five in 2001, one in 2002, two in 2004, one in 2007, two in 2008. The remaining three units were built in 2009, 2010 and 2011, the data shows.

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The average storage period for ATR aircraft is almost 1.4 years, according to the data. Excluding the Kingfisher fleet, the average stored period is one year.

The manufacturer says about 17 aircraft are stored for legal and/or technical reasons. Another 25 aircraft are in the process of being remarketed, with half of the fleet committed.

In ATR’s latest forecast, the Franco-Italian manufacturer says there are almost 1,700 ageing turboprop aircraft to be replaced in the 30- to 50-seat sector.

It identifies 724 aircraft in North America and another 160 in Latin and South America. Europe accounts for 380 replacement units, while Africa and the Middle East need a total of 208 aircraft. There are also 214 aircraft to be replaced in the short-term in the Asia Pacific region.

ATR divides its market forecast between turboprops and regional jets. For the 2010-29 period, turboprop demand is estimated at 2,950 aircraft, with 1,250 in the 61- to 90-seat category, 1,150 units in the 90- to 120-seat category and 550 in the 30- to 60-seat category.

The manufacturer says that 30- to 90-seat turboprop is expected to exceed RJ deliveries with the introduction of larger capacity, latest technology aircraft.

High fuel costs have made propeller aircraft cost-efficient on shorter routes compared with jets, according to ATR. The manufacturer estimates that regional jet fuel costs are 66% higher than turboprops on 200 nautical miles (nm) sectors, 54% more on 300nm sectors and 47% more on 400nm sectors.

ATR says the ATR 72-500 model mainly replaced the ATR 72 first generation aircraft, the -200 and the -210 series.

The ATR 72-500 also replaced the 50-seat regional jet, which was not the case with the first generation ATR 72 models as fuel prices were favourable at the time.

The top ATR 72-500 operators include Brazil’s TRIP, Malaysia Airlines’ Wings and Firefly, Lion Air’s Wings Air and the UTair Group.

The introduction of the -600 series, since 2012, has yet to have an effect on the residual values and lease rates of the -500 model.

The manufacturer says the -500 model is close to the -600 series in many aspects. “Since the launch of the -600 series in 2007, the -500 was improved notably in the avionics and the cabin areas,” says the manufacturer.

Besides, the last -500 deliveries have the -600 standard equipment, adds ATR. And this is reflected in the type’s appetite from the investor community. “The -500 benefits from the -600’s appetite from operating lessors. The type can be a point of entry into the marketplace. Some lessors got into the market with the -600 series and are now looking at the -500 model,” says the manufactruer.

According to ATR, the -500 model retains its value well. At its fifth anniversary, the aircraft is still 75% worth of its original price for a 2012 delivery, says ATR. This compares with 60-65% value retention in 2009 for a new delivery.

At its 10th anniversary, the aircraft is still 55% worth of its original price for a 2012 delivery, compared with 50% for a new delivery in 2009, it says.

Collateral Verifications’ vice-president of commercial aviation services Gueric Dechavanne says many operators have right-sized their fleets and are placing aircraft, such as the ATR 72 on shorter routes to maximize the mission capability of this aircraft as well as taking advantage of the attractive operating economics. “There has also been more interest from the lessor community with orders from the likes of Nordic Aviation Capital, Air Lease, and GECAS, which is a good sign for the long-term future of the type and family of ATR products. Collateral Verifications sees this trend continuing, which should provide more stability to the current values and lease rates.”

Stuart Rubin of ICF SH&E says the outlook for the type is cautiously optimistic although current populations of parked and available aircraft (43 and 20 respectively) may be an indicator of softening demand for the near term.

Cargo conversion?

ATR unveiled bulk freighter (tube version) and ULD freighter (large cargo door version) cargo conversion programmes in 2002.

About 120 units have been converted with approximately 55 ATR 72-200/210 aircraft.

Flightglobal’s Ascend says most ATR 72 freighter conversions are bulk freighters as the large cargo door remains a relatively expensive modification in a market currently operating with low margins.

Moreover about 200 ATR aircraft that were delivered before 1994 are still in service, says the manufacturer. “That first generation aircraft can still be in service until 2020,” says ATR.

With the oldest ATR 72-500 having been delivered more than 16 years ago they will soon start to become eligible for conversion as they reach suitable age.

However the conversion market has been sluggish recently due to the downturn in the cargo segment combined with a number of aircraft available.

Although availability is currently high, most ATR 72-500s are to return to service soon. Moreover ATR argues that aircraft values are too high for conversion.


Etihad Regional, previously known as Darwin Airline, recently agreed to add the ATR 72-500 model along with its Saab 2000 fleet. The Swiss carrier leased four 2001-vintage ex-Air Dolomiti aircraft from Nordic Aviation Capital.

Another three ex-Air Dolomiti aircraft were also sold to Castlelake. The 1999/2000-vintage aircraft are being placed with Asian Wings Airways.

In the final quarter of 2013, Myanma Airways purchased an aircraft from Aer Arann while Intertrade purchased an aircraft from TransAsia Airways.

MWG purchased an aircraft from Nordic Aviation Capital in the final quarter of last year.

Ascend recorded two placements by Danish lessor Nordic Aviation Capital

UK carrier Blue Islands and Myanmar’s MGW during the period as well as one placement to Argentina’s BQB Lineas Aereas.

The Kingfisher and Jet Airways surplus fleets have been much of the talk over the past year.

Some 1999-vintage aircraft have ended up in Brazil with Passadero Linhas Aereas under operating lease placements.

Investec Bank recently sold one ex-Kingfisher aircraft to Air Calédonie after agreeing leases to Nok Air and JetKonnect for a total of four aircraft. It says it has a letter of intent for another two aircraft.

“Almost all ATR 72-500s previously operated by Kingfisher Airlines will return to service,” says Philippe Liénard of Aelis Group. The firm, which has been involved over the past two years in the ATR 72-200 market with remarketing mandates from Eurolot and Willis Lease, is also remarketing some ex-Kingfisher ATR 72-500s on behalf of French bank BNP Paribas.

Liénard says the lease rates are between $100,000 a month and $165,000 for newer models with the Kingfisher aircraft expected to be placed between $110,000 and $140,000, depending on the engine condition.

Flightglobal understands that some ex-Kingfisher aircraft have been placed between $110,000 and $120,000 a month.

One leasing source says lease rates that were at $120,000 a month a year ago are now hovering around the $100,000 mark.

Another leasing source says aircraft with build year after 2000 are trading above $110,000 a month.

Last-off –the-line deliveries are expected to be placed at $165-170,000 a month lease rates, sources indicate.

A 1999-vintage aircraft would sell in the $7 million to $8 million range, depending on the engine and landing gear condition, according to a source.

A 2006-vintage aircraft would sell in the $10 million to $11 million range, the source says.

The last deliveries are trading in the $12-13 million range, says a trading source.

Lease rates and values

Ascend says base values increased in 2013, reflecting the improved long-term outlook for the turboprop market and better than-expected value retention.

However the appraiser firm says market values and lease rates have slightly declined in the first quarter of this year.

Collateral Verifications says values and lease rentals have remained stable over the past year but also noted a softening over the past few months.

“We believe this may be due to the increased availability and strong push by ATR to move operators to the latest variants, such as the ATR 72-600. The latest variant of the type, the ATR 72-600, has also performed well with new values around $18.56 million and monthly lease rates of $190,000,” says Dechavanne.

MBA says market values are within 5% of base values for all vintages. The appraiser firm expects the strong market to continue and residual values to remain strong.

Ascend has a $7.25 million current market value for a 1997-vintage ATR 72-500 aircraft. ICF SH&E is the lowest with a $5.3 million quote, while MBA appraises the aircraft at $5.4 million and Collateral Verifications values the aircraft at $5.9 million.

For a 10-year-old model, current market values are between $8.7 million (ICF SH&E) and $10.7 million (Ascend). Collateral Verifications values the aircraft at $9.3 million. MBA has an $8.8 million quote.

A 2008-model is valued at $14.5 million for Ascend, $12 million for Collateral Verifications and $12.4 million for MBA. ICF SH&E has a $11.5 million quote.

The last deliveries have current market values between $15.3 million (ICF SH&E) and $18.1 million (Ascend). Collateral Verifications has $15.9 million, while MBA values the aircraft at $17.4 million.

Monthly lease rates vary from $50-65,000 for oldest models says MBA to $90,000 a month for Collateral Verifications. ICF SH&E’s range is $75,000 to $85,000 a month. Ascend says the lease rates for oldest aircraft are $75,000 a month.

A 2004-built aircraft commands monthly rentals at $125,000 for Collateral Verifications, $110,000 for Ascend while MBA has a $90-100,000 range. ICF SH&E says monthly lease rates are between $110,000 and $120,000.

Collateral Verifications says a 2008-delivery has monthly lease rates of $145,000 while Ascend has $130,000. MBA says the lease rates range is between $115,000 and $125,000 a month, ICF SH&E has a $120-135,000 range.

Collateral Verifications and Ascend have $165,000 and $150,000 quotes for a 2012-built aircraft, respectively. MBA is on the lower side with $140-150,000 a month. ICF SH&E has a $140-150,000 range.