Supply chain and staffing bottlenecks will remain a challenge into 2023, but new ATR chief executive Nathalie Tarnaud Laude remains confident the European turboprop manufacturer will manage to accelerate production and deliver “at least” 40 new aircraft this year. The figure represents a sizeable increase in its performance in 2022 when it shipped 25 new and 11 used aircraft. With just 25 new aircraft deliveries, ATR fell short of the “between mid and high 30” target set by Tarnaud Laude’s predecessor, Stefano Bortoli, in February last year.
The slower-than-expected post-Covid recovery of the supply chain and staffing levels account for the two main reasons for the shortfall. ATR aims to hire 150 people this year. “We face the same challenges as many other OEMs,” Tarnaud Laude told AIN. “We see that some people are coming back to us,” she said, pointing out that suppliers as well as Airbus, ATR's much larger neighbor in Toulouse, want to recruit people with the same competencies. “We are all competing for the same talent. That is not so easy,” remarked Tarnaud Laude, who joined ATR in September last year from Airbus Helicopters, where she led the medium-sized, twin-engine, multi-role military helicopter NH90 program.
To try to mitigate the bottlenecks in the supply chain, ATR increased the level of cooperation with its suppliers—specifically with its tier 2 and tier 3 suppliers, whose resources became stretched because of the pandemic. “We are giving them a better visibility of our needs and ramp-up plans so they can start ramping up,” she said. “We have [component production] needs for the [final assembly line], but equally so for the repair of parts. We are working hand-in-hand with our suppliers so they can allocate their engineering resources where they are needed.” Giving them direct financial support is not ATR’s role, she stressed. “We support them financially indirectly through building their order book and advancing some payments for that order book,” she explained.
ATR secured firm orders for 26 aircraft last year, compared with 35 in 2021. “Demand is not recovering as fast as we had wanted,” acknowledged Tarnaud Laude. She cited three key reasons for the slow demand, including the delayed lifting of travel restrictions in the Asia-Pacific region, which accounts for 40- to 50 percent of ATR’s market, and the availability of a large number of second-hand ATRs for sale. Meanwhile, customers showed hesitancy to order aircraft owing to geopolitical tensions—not least Russia’s invasion of Ukraine—and supply-chain issues, which translated into “quite heavy price increases,” according to Tarnaud Laude.
For this year, ATR projects it will sell more than 40 aircraft. “This is quite a significant increase [from 2022]. We have tangible prospects at the moment,” she said. The second-hand market has withered and ATR analysis, released last year, predicts demand for at least 2,450 turboprop aircraft over the next 20 years. Aircraft replacement will account for the primary driver of demand, accounting for 1,500 new aircraft, while the evolving freighter market will need some 500 turboprops by 2041.
To tap into the regional freighter market, ATR has developed the ATR 72-600F which the company plans to display at the Paris Air Show in June, Tarnaud Laude revealed. “It will also fly there,” she confirmed. ATR's new purpose-built regional freighter’s launch customer, FedEx, has given “very positive feedback” on the operation of the aircraft, she added.
Tarnaud Laude disagreed with any notion that operators have delayed ordering new aircraft due to uncertainty over the new technologies under development to power regional aircraft. “We do not see that,” she said. “However, we do see that our customers are very interested in new [propulsion] technologies.” New technology pathways for regional aircraft include hydrogen-fuel cell-based propulsion, electric, and hybrid-electric.
“We have our own roadmap, the hybrid-electric ATR 'Evo,' and we recognize that there are other players working on other technologies,” she explained. “We are looking very seriously at what is happening at the moment…We do not see this as competition. We see this as an advantage to our ambition to maintain the leadership position in the turboprop market…All of these new technologies are going to be compatible with an ATR product.” Many ATR operators such as Spain’s Air Nostrum, Ireland’s ASL Aviation Holdings, Icelandair Group, and Ravn Alaska have committed to installing hydrogen-propulsion conversion kits in their existing or future turboprop aircraft fleets.
ATR has not yet inked a firm order in China since the country’s regulatory authorities validated the type certificate of the ATR 42-600 in the fall of last year. While admitting that sales have not recovered as fast as she had hoped, Tarnaud Laude dismissed that protectionism—China has developed its own turboprop, the MA700, though the program remains stalled thanks to trade sanctions by Canada on the PW150 engine—or geopolitical tensions play a role. “We need to build a footprint in China by explaining the advantages of the ATR product,” she concluded.