ATR signs another deal with lessor Abelo as demand grows |

ATR announced its first and only commercial agreement during the Dubai Airshow on Tuesday, signing a Heads of Agreement with lessor Abelo for 10 72-600 turboprops plus 10 options. The agreements need to be finalized, but Abelo CEO Steve Gorman said that this will be done during the course of December. The press event was announced as a last-minute presentation late on Monday evening, so apparently came a little as a surprise for ATR itself. Ireland-based Abelo is a lessor specialized in turboprop aircraft. Backed by Oaktree Capital Management, the company was launched in June 2022. It owns a fleet of 58 aircraft that are placed in 18 countries, mostly in Europe, of which 60 percent is ATR aircraft. At the 2022 Farnborough Airshow, Abelo signed an order for 10 of the ATR 42-600S Short Take-Off and Landing-version plus 10 -72-600s. The first aircraft of this original order will be delivered next month. Gorman said that four aircraft have already been placed with European airline customers. The new order is for growing demand in the market. “We saw the need for more aircraft. There is demand for both replacement and growth. We see continued global growth, more particularly in Southeast Asia,” said Gorman. “We have always seen demand increasing post-pandemic. I think it has turned around a lot quicker than we had anticipated, in particular Southeast Asia. We have seen growth accelerated. We probably expected this order to come about in 2024 when we will have placed the entire first order. Given the demand we are seeing and the accelerated demand, we probably come back to market a bit sooner than we had anticipated.” For Abelo, the ATR family is the ideal aircraft for the market: “This aircraft type is all about connectivity. It tends to be infrastructure-light in its need. As domestic travel increases, it is the aircraft of choice in the smaller regions. Abelo will take delivery of the additional aircraft between 2026 and 2028, while those of the original order will be delivered from December to 2025. “That’s where we see the strong value in the partnership with Abelo, which is a long-term, five-year horizon to place and add aircraft in regions where demand has picked up. That is a very strong partnership we have. We are very delighted to have this order today,” said Alexi Vidal, the newly-appointed Senior Vice President Commercial SVP. Ramping up the production After the signing, AirInsight sat down with Vidal to discuss in more detail the situation of ATR. As reported last week, ATR turned around a negative EBITDA of €-3 million in Q3 2022 into a positive €3 million this year. After 25 deliveries in 2022, the airframer is expecting to get to 40 this year. “We are continuing to grow the production. We want to reach the 60s per year and then the 80s per year in the second part of the decade. But we are in an environment that has some constraints in the supply chain. It is not easy, but we are working hard to ramp up,” says Vidal. “The good thing is that ATR is the number 1 manufacturer (of turboprops) in production. We have growth ahead of us: growth in demand from the market and the supply, with growth in the production ramp-up. That is a very good situation to be in for ATR and our customers.” The supply chain issues of ATR are not dissimilar to what Airbus and Boeing have, although they depend on different engines than the turboprop maker. “I don’t want to name specific items or companies, but globally speaking, there are a couple of difficulties. One is raw materials, which goes really further down the supply chain. It is not the tier-1 suppliers but further down, which affects the entire aviation industry. We also see some longer lead times on the maintenance, repair, and overhaul, which is affecting the availability of parts. This is pretty similar to what we see elsewhere in the aviation industry.” The labor market is another issue, but Vidal says that ATR is able to attract new staff, despite the tough competition from Airbus in Toulouse. Raising awareness for turboprops ATR recently held an investor’s day in London. This has had nothing to do with an upcoming change of the shareholder split, which is currently 50/50 between Airbus and Leonardo. The purpose was different, explains Vidal. “What we are trying to do is raise awareness on the market of the turboprop technology and the ATR product in particular. Many investors in the market don’t realize that the ATR as it is today is already an extremely fuel-efficient aircraft that has low CO2 emissions. It is about 45 percent less compared to a regional jet. And that is today. Our operators know that, but investors sometimes don’t. This is something we are really keen on to raise the awareness.” ATR plans another technological step with the EVO, the new model that was announced in the spring of 2022. Vidal says that the project is still in the feasibility study. “We target major technologies for program launch and then entry into service in 2030. We have different concepts for the propulsion system that include hybridization, so a mix of an electrical motor and a turboprop running on sustainable aviation fuel in order to cut CO2 emissions and provide the most efficient and most reliable aircraft. Remember that our operators fly in remote places on islands and in the mountains. They need not only a sustainable aircraft but also a reliable and affordable technology for the passengers.” Vidal was unwilling to disclose with which engine makers ATR is talking.

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