Airbus-Leonardo joint venture ATR appears to be in a comfortable position as the last remaining large Western manufacturer of regional turboprops, with sole rival Bombardier divesting its Q400 programme.
That programme – which as a competitor to ATR is alongside China's AVIC MA600 and in-development MA700 – is being sold to Canadian utility-aircraft specialist Viking Air.
Bombardier has already ceded control of the CSeries, now the A220, to Airbus, and could contract aerospace activities further if it sells its CRJ regional jet line. Meanwhile, Boeing is moving closer to capturing an 80% stake in Embraer's commercial aircraft business.
Under those circumstances, ATR "can see" itself becoming the third-largest commercial aircraft manufacturer in 2019, said chief executive Stefano Bortoli during a briefing in Paris on 31 January.
But he warns that ATR "cannot be complacent" and must innovate to keep its aircraft relevant and "maintain its leadership for the long term" to stay "at the forefront" of regional aviation.
A crucial question is whether the lack of competition in the regional turboprop segment is beneficial for ATR and for operators and regional aviation as a whole.
Could, for example, the absence of another manufacturer make it more difficult for ATR to determine an appropriate timing for product makeovers or, for that matter, a new programme launch? Competition is, after all, what spurs one's own competitiveness.
Bortoli foresees 2019 as a "year of consolidation" as the effects of the planned changes at Bombardier and Embraer are not yet clear. "We will understand better what these announcements mean, particularly for the [Q400]," he says.
He believes, however, that Airbus's move into the upper end of the regional segment with the acquisition of the A220 will have no immediate bearing on ATR's business. Indeed, the prospect of potential joint sales campaigns to sell both ATRs and A220s to customers does not seem to be high on Bortoli's agenda.
Noting that ATR is focused on aircraft with fewer than 80 seats and a mission "sweet spot" of 200nm (370km), he says the turboprop manufacturer has its "own strategy" which is "independent" from that of Airbus. ATR does not compete against the A220 or Embraer's larger E-Jets, he notes.
Bortoli points out that ATR has continually invested in its aircraft family in an effort to keep it relevant for operators and passengers. Examples include the introduction of a more spacious, modern and quieter cabin on the ATR 42/72-600, and an optional enhanced vision system for pilots to improve operability at airports with limited navigational aids.
Today, ATR is making preparations for a projected short take-off landing (STOL) variant of the ATR 42-600, which would require several modifications, including a more powerful rudder. The manufacturer had planned to launch the variant in 2018, but now aims for go-ahead this year.
Talks with a number of operators and lessors are under way, Bortoli says. He foresees a replacement market for operators of smaller legacy turboprops that are capable of operating from small, remote airfields.
He notes, however, that investments in such improvements must be balanced against a premise of keeping the aircraft "easy and affordable", particularly for the smaller regional carriers that form a key part of ATR's customer base.
Bortoli describes the regional turboprop market as a "niche" segment with fluctuating demand for 90-115 new aircraft each year: ATR claims a 75% share of that market in recent years.
In 2018, ATR received orders for 52 aircraft – less than half of the 113 commitments gathered the previous year. The number of new-aircraft deliveries was relatively stable at 76, just two fewer than the 78 handed over in 2017. Bortoli foresees a similar number of shipments this year.
He does not expect a long-term decline in the turboprop segment: "We don't see it coming," he says.
He recognises that there is a reputational issue with turboprops and admits that "many" customers think they are "not modern". But he argues that, especially as environmental concerns become more prevalent, turboprops represent a "modern... responsible way of flying". Given that their engines burn less fuel than jet-powered types, they are "by design cost efficient and environmental friendly", he asserts.
Noting that electric propulsion concepts involve propellers, he says that turboprops offer a platform that is relatively easily adapted to such new technologies. "There is a blade... It is clean, it is proven," he says.
In November 2018, Air New Zealand and ATR disclosed a partnership covering joint exploration of the use of hybrid-electric propulsion on regional turboprops. Detailed studies are set to begin 2019. "We come back when we have something solid and meaningful to say," says Bortoli.
He acknowledges that hybrid electric propulsion technology is not available today, and that any new engine concept would need to be "affordable" in order to be adopted on regional aircraft.
ATR marketing material declares that "the stars are aligning for turboprops". Bortoli puts it more cautiously: "The turboprop aircraft has a future," he says.
For the time being, ATR is the "only player" that can offer prospective turboprop buyers a "durable" investment, Bortoli argues. "An airline is buying an aircraft with the certainty of an industrial player that will be there to support the aircraft for the life of the relationship. Nobody else can provide that type of guarantee."