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Monday, March 27, 2006

ATR Reports Its Best Market In 15 Years

To illustrate the resurgence in turboprops, ATR CEO Filippo Bagnato says, "We have to go back more than 15 years to register this high a level of sales."

Following recent reports in strong interest and sales from Bombardier [BBD] and Saab (RAN, March 20), ATR reported it had 90 firm orders for new aircraft in 2005 in addition to 26 options, according to John Buckley, vice president of sales for the manufacturer. In addition to passenger and cargo missions, 10 ATR 72-500s are going to the Turkish Navy. All the orders, the vast majority of which were for the ATR 72-500, were overseas with the bulk (50) going to two carriers in India - Air Deccan (30 aircraft) and Kingfisher (20). (At press time, Kingfisher announced it would convert 15 ATR 72-500 options to a firm order, plus an additional 20 options. The value of the contract, excluding options, is around $270 million list price. The additional aircraft are scheduled to be delivered beginning in 2007).

"That's a significant rise over the nine ordered in 2004," Bagnato said. "Fuel is a major factor in driving turboprop sales in India. There is also a growing middle class, which is doing great things for the aviation industry. We pulled down the production line in 2004, but in 2005 we delivered 15 aircraft to seven airlines."

ATR's objective is to deliver 25 aircraft this year and is targeting 40 aircraft in 2007. Buckley also expects that this year the U.S. majors will retain their commitment to the turboprop. The main question is what to do with the thousands of RJs in service with fuel prices continuing to rise. Until that question is answered, it is hard to predict what will happen in terms of sales of turboprops in America, he added.

To date, ATR has sold 778 aircraft (398 ATR 42s and 380 ATR 72s) booking five new customers during 2005.

The new aircraft market remains strong in Western Europe, Asia and the Indian subcontinent, ATR said. To support the market, ATR is opening two new spare parts centers in New Delhi and Auckland, New Zealand. It also expects to establish a support and training center in India. Cargo remains an expanding market for the aircraft, with 66 aircraft operating in cargo configuration now, 33 of which are in North America. Cargo now represents 10 percent of the ATR worldwide fleet.

Fuel is also driving the used market, with ATR increasing the economic life of its aircraft from 75,000 to 100,000 cycles. "That helps maintain interest in the aircraft, and keeps the price of the aircraft firm, if not rising," Buckley said.

>>Contacts: John Buckley, ATR, (703) 736-4221; Filippo Bagnato, ATR, +33 (0)5 62 21 62 21<<

ATR Firm Orders 2005
Airline Country
ATR 42-500
ATR 72-500
Air Deccan India
CCM Airlines France
Finncomm Airlines Finland
Air Caledonie New Caledonia
Air Caraibes Guadeloupe
Turkish Navy Turkey
Binter Cnarias Spain
Air Tahiti French Polynesia
Air Madagascar Madagascar
Pakistan Int'l Airlines Pakistan
Kingfisher Airlines India
Source: ATR
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