In the year since Christian Scherer became CEO of French-Italian turboprop aircraft manufacturer ATR, the company has realized a good run of business. As of November 8, the OEM held firm orders for 119 aircraft, for at least 80 estimated deliveries in the year. ATR managed to win over customers in the U.S. for the first time in 20 years, as well as naming FedEx as launch customer for its brand new ATR72-600F cargo.

AIN sat down with Scherer before the Dubai Airshow to discuss the changes at the company since he took over, and the company's outlook for the future.

AIN: The situation at ATR is much better than last year. What changed?

Scherer: The story doesn’t stop on December 31 and start again on the first of January. It is important to look at the performance over time. It is true that last year, ATR sold fewer aircraft than it produced, but over time, our commercial performance has always been, and is still, very strong. This year we managed to penetrate new markets and get strong orders. By the way, the year is not over yet.

It’s partly due to a strong focus on commercial aspects, but it is also a reward for the important work previously done. Considering China, my predecessor put high-value resources in the country, and we are now reaping the benefits. It is also true that we have boosted our commercial efforts. I personally dedicated my time to this task and it contributed to bringing energy to commercial teams.

Our objective was to “break down the barriers” on some high-potential markets. In India, ATR won the first-choice campaign with the country’s biggest airline, Indigo. It is a marriage of the Indian [airline] leader with the regional aircraft leader, and we are very satisfied with it. But at the same time, the regional subsidiary airline of Air India is still buying ATR aircraft, so that both worlds, ancient and new, are getting equipped with ATRs. It is important because the Indian market has a very significant potential.

In China, even though we are still waiting for certification, we have obtained formal pre-commitment from private customers. They are talking to the authorities to lift this lock and get the ATRs certified, because China needs the aircraft, and otherwise business opportunities are getting lost. The opportunities depend largely on the will of Chinese authorities, but if the market were widely open, we could count on 300 aircraft in the country.

AIN: What is the sales target in 2017?

Scherer: It is hard to talk about specific figures. Our target is to have a book-to-bill [ratio] greater than or equivalent to 1, and to maintain or increase our order book, both quantitatively and qualitatively. What is even more important is the quality of the order book, and I can say that we are very happy to have won new significant customers over this year.

 

AIN: What about the American market, where ATR has signed an LoI [Letter of Intent] in 2017 after 20 years without an order?

Scherer: It would be presumptuous to say that this market is starting over again. But there is awareness in the U.S. of the economic signature of turboprop aircraft. It is perhaps partially due to our commercial efforts; perhaps also because smaller and older aircraft arrive at the end of their life. Considering that every airline wants to grow, an airline that owned a 25-year-old 30-seat aircraft can think of changing for a 50-seater for the same operational cost. There is a generational change that considers the benefit of turboprops, thanks to the improvement made by the manufacturer’s leader. A turboprop is a very comfortable aircraft that generates less noise than a regional jet, for half the operational cost. It is our marketing effort that has paid off.

 

AIN: Middle-East and Africa are significant markets for aircraft manufacturers. What is ATR's forecast for these regions?

Scherer: It is obviously a very different market when comparing ATR and the manufacturers that produce large jets. In Africa, especially, we see a 300-aircraft market in the next 20 years. Most of them will be 70-seaters, but about 50 of these aircraft will be smaller, corresponding to an ATR-42. In Africa, I find ATR to be too weak, and we have put a new focus there. We are especially happy that the first, competitive, open and very analytical campaign in Africa with Air Senegal was won by ATR. All the competitions in Africa are not as thorough, but generally include political and emotional aspects. I think it is a sign of a rebirth of ATR in Africa. When there is a thorough, transparent and financial analysis, ATR wins.

Iran is a big market with a lot of potential. The authorities have understood that economic and social improvement and emancipation come with the expansion of regional air traffic. ATR is the manufacturer that has delivered the most aircraft in Iran since the U.S. embargo was partially removed in 2016, and I think it will continue.

ATR is a reference in the Maghreb, as in Algeria. In the Middle East, the market is very different for regional aircraft. We are very happy to be present in Saudi Arabia with Nesma [leasing company operating two ATR-72 600s]. This market is not a nirvana, but we see some prospects there.

AIN: What about a 100-seater turboprop that has long been talked about, but still to be launched?

Scherer: I think there is a market for a 90-seater. But talks are getting more intense within the industry about disruptive technologies that could be adapted to a regional platform. The question is: should money be risked today in a new program, when a competitor could arrive in few years with totally disruptive technologies that would make the current development obsolete? We are facing this dilemma, and until ATR makes a stand on this topic, the one who decides without knowing what ATR will do is taking a huge risk. We are a reference today, with [aircraft in service with] 200 airlines in 100 countries. The disruptive improvement could be in engine technologies, with hybrid and electric propulsion, in industrial manufacturing, in piloting with “less than four hands…” We don’t have a religion on it right now, but we are working on it.



AIN: Does the recent purchase of a majority stake in the C Series by Airbus make a change for ATR, considering that the Q400 is a direct competitor?

Scherer:  The purchase doesn’t change anything for ATR. The main question is: what will Bombardier do now with its remaining portfolio? But only Bombardier can answer this question.