PARIS – Regional aircraft manufacturer, ATR, announced that two Chinese customers had signed letters of intent (LOIs) for 13 48-seat ATR 42-600 turboprops Monday at the Paris Airshow.
Xuzhou Hantong Aviation Development Company signed an LOI for 3 ATR 42-600s, while Shaanxi Tianju Investment Group signed an LOI for 10 of the type. Together their orders are worth more than $234 million at current list prices, and the aircraft are scheduled for delivery in 2018.
“In responding to the Chinese government’s strong intention to promote the General Aviation market, Tianju has made an intensive market study and identified Xinjiang as the ideal location to develop commuter service under General Aviation operations,” said Yang Qiang, Chairman of Tianju Group.
“We are convinced that the specifically adapted ATR 42-600 will provide the best answer for this market segment, which so far does not have operators dedicated to this segment. We are pleased to partner with the world’s leading regional aircraft manufacturer to develop commuter service in Xinjiang and strongly contribute to China’s ‘Belt and Road Initiative,’” Qiang conclude.
Zhou Bingzhen, General Manager of Xuzhou Hantong echoed Qiang’s comments, “Under Xuzhou local government’s strategy to develop Xuzhou as a new cargo and regional aviation hub, Hantong is to focus on regional cargo and commuter services under general aviation, as there is a huge gap in both areas. We are pleased to partner with ATR, the world’s leading regional aircraft manufacturer, and select ATR 42-600 to kick-off our strategic cooperation between the two companies. Meanwhile, Hantong is happy to have Reignwood Aviation, the renowned and experienced general aviation player in China, become the operation partner to jointly develop commuter services in eastern China.”
“ATR aircraft are widely recognized as the most fuel-efficient aircraft in the regional market, especially for the short-haul sectors. Thanks to their low fuel consumption and low trip cost, ATRs allow airlines to develop new markets, as highlighted by the over 100 new routes that our aircraft create around the world each year” said Christian Scherer, ATR’s Chief Executive Officer.
Turboprops are rare in the Chinese market
The order for turboprops in the Chinese market is a surprising one, given that at present China has very few turboprops and even jets with fewer than 110 seats.
The Chinese market is unlike that of the United States, in that it has 60-70 major cities that can support mainline flights, but very few small airports like Cedar Rapids, Iowa or Peoria, Illinois that can support regional jets. So the development of regional aviation has been stilted in China because of market dynamics.
But if there are markets to try this out in, Suzhou and in particular the Northwest Xinjiang Province make as much sense as any. Suzhou is a major manufacturing metropolis, but its airport is underdeveloped due to the proximity to Shanghai (Hongqiao Airport is just an hour away by road). The ATR 42-600 represents a low-risk way to grow a few dedicated point to point routes from Suzhou.
Meanwhile, in Xinjiang, the mountainous desert terrain outside the capital and economic powerhouse increase the demand for air transport relative to the underlying market economics and so, as a result, there is plenty of demand for service to smaller cities in the province.
The Chinese government has ambitions to use the province as a ground logistics hub, and in that sense, the ATR 42-600’s cargo capabilities will also come in handy.