ATR on a roll as tech upgrades reach market

 - March 8, 2007, 4:44 AM

ATR’s sales momentum didn’t pause for the turn of the calendar as the Franco-Italian turboprop maker landed two more contracts for a total of eight turboprops before the ink had dried on last year’s financial reports. Canarian Navigation and Aerial Services, a company operating from Spain’s Canary Islands, announced a $36 million contract for two new ATR 72-500s for delivery this year following an agreement for four made last September. Azerbaijan’s $100 million order for four ATR 72-500s and two 42-500s for the central Asian republic’s national carrier, Azerbaijan Airlines, will count toward ATR’s 2006 figures, with delivery earmarked for this year and next.

The sales came on the heels of Trip Linhas Aereas’s firm order for seven new ATR 72s plus five options placed in December, marking the first sale of new ATRs to a Brazilian airline. Last year the joint venture between Italy’s Alenia Aeronautica and EADS booked orders for 63 aircraft (56 ATR 72-500s and seven ATR 42-500s) and options on another 25–the manufacturer’s second highest tally following contracts for a record 90 aircraft the previous year.

CEO Filippo Bagnato said that in 2005 ATR “surprised the market, leaping from orders for six aircraft in 2004 to 90 in twelve months,” while collecting 10 new clients. The Asia-Pacific area accounted for 38 percent of orders for the -500 series (43 percent of total ATR orders) followed by Europe (37 percent). North America accounted for 5 percent of orders. ATR opened new markets in South America and Africa, where customers placed orders for 12 airplanes. Meanwhile, ATR continued its strong presence in the turboprop aftermarket, placing 29 used airplanes last year.

A boost in regional traffic, turboprops’ favorable fuel-burn rates compared with those of regional jets in a high-price market and environmental pressures have helped boost ATR’s prospects at the same time the company invested heavily in model improvements. “The new -500 series is completely different from the turboprop that operated just a few years ago,” Bagnato said.

During a late-January briefing in Paris, Bagnato told journalists that India’s Kingfisher Airlines had received a -72-500 with a new “Elegance Cabin,” the first turboprop equipped both with LED lighting in the whole cabin and an in-flight entertainment system. For about $100,000 per aircraft, Vision Systems’ in-flight entertainment system will fly aboard new ATR 42-500s. It can also be installed as a retrofit. Other advances under development include an “innovative cabin concept” scheduled for unveiling at the Paris Air Show, a 5-percent power increase in the ATRs’ Pratt & Whitney Canada PW127 turboprop engines, a paperless cockpit and a new avionics suite.

After watching deliveries increase from 15 aircraft in 2005 to 24 last year, ATR expects to build 44 airplanes this year and 60 next year. Revenues, which jumped from $542 million in 2005 to $700 million last year, will reach $1 billion this year, according to ATR’s projections. It expects that to increase to $1.2 billion next year.

At the end of last year ATR’s backlog stood at 124 aircraft, a 40-percent increase over December 2005’s 89-airplane total. Last year ATR moved its French parts distribution center from Toulouse to Paris and its U.S. center from Washington, D.C., to Miami. It opened a new facility in Auckland, New Zealand, and plans to unveil new centers in Delhi and Bangalore, India, this year.