Interview: How ATR Leads the Turboprop Market, Sustainably

DALLAS — Larger jet-driven plane makers like Airbus and Boeing have a diverse product portfolio, ranging from short, medium, to ultra-long. These turbofan-based aircraft, however, do consume a large amount of aviation gasoline and produce a significant carbon footprint.

Being in an environmentally conscious world, do we really need jet-driven aircraft flying shorter, regional routes when there's a more sustainable option?

With over four decades of experience, ATR has built a robust, durable set of turboprop aircraft capable of flying in rigid conditions and, most of all, providing vital, essential air services between communities, in addition to operating in certainly established aviation markets.

ATR expects over 2,500 turboprop aircraft to be flying in the skies by 2040. With its key advantage of lower operating costs and lower carbon emissions, ATR is positioning itself as a strong competitor against regional jets in the 'under 500 nautical mile stage length.'

Airways Correspondent Siddharth Ganesh discusses ATR's post-pandemic strategy of offering low-emission aircraft in an environmentally conscious world with Alexis Vidal, Senior Vice President of Commercial, ATR, along with a complete overview of the operations and ventures of the manufacturer.

SG: We heard a lot about airlines during the COVID-19 pandemic, but as an aircraft manufacturer, what did you learn coming out of this turbulent period?

AV: It was an extremely severe situation for the airline industry. From a manufacturer's point of view, we had to not only support our customers but also adjust and resize our production and company. The adaptation plans for any aircraft manufacturer have been severe, and even today, despite being out of the pandemic, we continue to have issues pertaining to the supply chain.

We want to ramp up production again, but that’s just difficult with the existing supply chain issues. We have also seen how crucial and vital air transportation is for society. ATR aircraft predominantly fly on domestic routes (85%), and nearly 40% are essential air services. During the pandemic, we have observed societies and communities lose their connectivity, be it for VFR or freight (essential goods).

We want to connect large demographics together and internally, too. But the geographic element is also one to consider when you have islands, mountains or poor infrastructure, you need that essential air connection, and this is what ATR is about.

Alexis Vidal

And what are some positive changes in the organization due to the pandemic?

Let's start with where we are currently sitting and speaking with each other—our customer experience center. During the pandemic, we could not travel, so we have been digitalizing ourselves and the way we communicate with our customers. This customer experience studio is the perfect example.

We have several high-quality cameras all over the place. So we can connect with any of our customers digitally from here and provide a range of demonstrations and services; it's something great for our commercial team.

In terms of manufacturing, we have to adapt to the supply chain bottleneck. Our final assembly line is also undergoing digitization, so we’re more efficient and agile in our manufacturing.

Market: Over a thousand ATRs are flying around the globe. Compared to 2022, how are you fairing for 2023 regarding aircraft deliveries, and what's your ideal target?

There are effectively 1200 ATR aircraft in service. We delivered 25 aircraft in 2022, and this year we’re hoping to deliver 40 aircraft. Demand is growing, and we are in a clear ramp-up situation; 25 to 40 already shows a 60% increase. We will also continue ramping up, especially through the second part of this decade, to reach about 80 aircraft a year.

In 2015, we had our peak in deliveries with 88 aircraft. So, you can see how the numbers can be based on demand. The market and society today expect more sustainable and efficient aircraft, and we believe we have a strong product. In regard to the present-day backlog, it's 160 aircraft. Towards the end of this decade, our ambitions are to get to 80 aircraft deliveries a year.

Alexis Vidal

Your forecast shows 2500 turboprops are needed through the next 20 years. What market share of this are you targeting?

That’s very interesting because we’re post-pandemic, and we are the only turboprop regional aircraft manufacturer of our size out there, so that’s a very strong signal that we have been resilient, and our product line is fit for the growth of the future.

Rephrased: Given our new product in the turboprop market, we anticipate that ATR will dominate the majority of the addressable market share in this sector throughout the current decade.

For the following decades, it would depend on the competitive landscape—what new aircraft and technology are being developed. But we also have the ATR EVO hybrid concept.

Asia-Pacific looks very promising to you; what further steps are you taking to penetrate this opportunity?

Asia Pacific has been a strong core market for regional connectivity, and for us, ATR in particular. I was in India and Indonesia a few weeks ago. India has a very rapidly growing GDP, and ATR already has a strong presence there, with IndiGo leading among other smaller carriers.

For a country with a lot of first-time travelers, it’s a big opportunity. We want to continue to develop in this market. Indonesia was the other place I was, where the largest ATR operator is present, Wings Air. With nearly 17,000 islands across Indonesia, of which around 6,000 are inhabited, the connectivity we can provide here with the ATR is huge.

We also see other markets in the region opening, like Japan, the southwest region, and the islands. Korea is another strong market for us to develop, especially on the west-to-east connections.

ATR is a lot about purpose, connectivity, and the social element—what can we provide to a country or market in terms of air services and also how much further can we develop there.

– Alexis Vidal

Once again, the United States seems to be back on ATR’s agenda. Would you call it 'challenging' to sell your airplane to such a jet-driven market today?

We have entered the US on both passenger operations with Silver Airways in Florida and with FedEx for freight. Now, to scale, we see a lot of opportunities.

There are several hundred regional jets, of which, let's say, 450 are 50-seaters (ERJ series, for example), and with our credentials, compared to one regional jet, we emit 45% less CO2. This is where we reduce emissions significantly and also reduce costs for our operators, as the ATR is cheaper to operate than a regional jet.

"There are more than 800 regional routes in the US that have been stopped or cut in the last 20 years because the economics were not there. But these were based on regional jets and not turboprops, which have a much lower cost per seat. You can really recreate those links, and I remain optimistic.

To come back and increase our presence in the US, we have to conduct work and raise awareness in society, with airlines, airports, and with the passengers themselves, about what we can bring to them.

It used to be, let's say, ‘Jet-mania' some decades ago when the world was less cost-conscious and also less sustainably conscious. But today it's different, and that’s the game changer and a big advantage for us.

– Alexis Vidal

What about Europe? There is a push to use high-speed rail, especially for the same stage lengths where ATR flies well. Comment?

It is true that there’s a decent political motivation for rail over the air; it's a debatable topic. We should wonder what would happen if high-speed rail and flying could complement each other; of course, they would compete in certain sectors as well. But I can’t help but wonder.

Take France, for example; there are high-speed trains from north to south, but what about east to west? It's non-existent. So why not look at air connectivity that ensures sustainability without having to invest and build a large-scale project for setting up high-speed rail infrastructure?

Also, high-speed rail might be great domestically but poor across the border, and this isn’t the case with airplanes. It’s still a challenge, and you are right. We need to see how we can complement each other.

Where are you facing challenges and issues today?

The most obvious is the supply chain. The industry must get back to a normalized supply chain where we can produce the required aircraft. The second is sustainability.

We are superior to a regional jet in terms of emissions, at 45% lower, but the challenge is to make this paradigm shift, for example, in the US, to act now and not 20 years down the road.

Sustainability: Pushing further with your advantage for lower-emission flying, when will 100% SAF-based operations with the PW127XT engine be available?

The XT itself has been certified since October 2022, so virtually every aircraft we deliver today is already equipped with the XT. It delivers two important things: first, reduced fuel consumption (3% lower compared to the previous engine) and 20% lower maintenance costs. So the cost per seat really comes down to our operators.

In addition, today we are certified to accommodate a 50% SAF blend with the engine. We aspire to 100% SAF, and we expect that to be up and running in 2025. It will be on the same engine, and of course, there will be some flight testing and certification initially.

The SAF challenge is not about certifying engines that can run on it but about the SAF supply itself.

In the coming days, we will explore, in a nutshell, the underlying process of assembling an ATR aircraft and take a peek into the ATR EVO Concept, so stay tuned to Airways.

Featured image: ATR

https://www.youtube.com/watch?v=xzpdl6AnKlA&t=45s