ATR slashes delivery and sales outlook

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The resurgence of ATR has began to slow after net orders declined 75% to 29 aircraft in 2008, while delivery deferrals have prompted it to arrest its production ramp-up. However, the airframer has secured its first orders for the new -600 series models and is confidently forecasting it will in 2009 match or exceed its output record of more than 60 deliveries.

The EADS/Alenia Aeronautica joint venture secured 42 gross orders in 2008, but suffered 13 cancellations (two ATR 42s and 11 ATR 72s). The airframer had been confident - even as recently as the Farnborough air show last July - that it would take its total sales through the 1,000-order mark in 2008, but ended the year 21 aircraft short.

ATR chief executive Stéphane Mayer says that the 1,000 orders target "was set before the crisis, but we will maintain the objective" this year, although he cautions that the "plan for 2009 is difficult because there are a lot of uncertainties". He adds that ATR has already seen "some difficulties at some of our customers", which has prompted some delivery deferrals and cancellations. He warns that "2009 could be even worse".

In the face of the deteriorating market ATR is to "stabilise" its production rate after the ramp-up of recent years. The company had planned to boost output to 75 aircraft this year and to more than 80 in 2010, but Mayer says that production will now remain "at the rate reached in December 2008 of approximately six a month. This allows us to deliver more than 60 aircraft in 2009."

Despite the move, ATR should still match or beat its existing 18-year-old production record set in 1991 when 62 aircraft were delivered. Mayer says that ATR's 169 aircraft backlog represents 2.5 years of production at the current rate, and the timing of any return to output growth "will depend on how long and deep the financial crisis lasts".

Revenues during 2008 rose to $1.3 billion from $1.1 billion the year before.

Work is progressing on the new ATR 42/72-600 family, for which 39 orders have now been secured through new deals and the migration of contracts for the existing -500 series. Kingfisher Airlines has switched its 23 ATR 72 orders to the -600s while Alenia has 10 of the variant on order for the Turkish navy. New -600 customers comprise Air Tahiti (three ATR 42s and two ATR 72s) and Air Caraibes (one ATR 42).

The new family features a series of improvements including a new advanced flightdeck, more powerful Pratt & Whitney Canada PW127M engines, a revised cabin and higher operating weights.

The ATR 72 development aircraft, which has been modified to -600 specification, had its power-on in December and is due to fly this year. ATR says the first -600 production aircraft will fly in 2010 and deliveries are due to begin in the first quarter of 2011.

Mayer says ATR continues to study a Chinese final assembly line as part of its drive to stimulate orders from the country's airlines. However, any agreement on such a move would be "a very long, complex process", so is at least two years away.