ATR CEO ‘reasonably optimistic’ about Iran resolution

ATWOnline – ATR CEO Christian Scherer is “reasonably optimistic” the turboprop manufacturer can resolve the issues around new Iran sanctions and its pending deliveries to Iran Air.

The Iranian national carrier placed an order for 20 ATR 72-600s, eight of which had been delivered by June when the Office of Foreign Assets Control (OFAC) export license was revoked.

According to Scherer, conversations with OFAC are continuing and it may be possible to still get licenses for some of the outstanding aircraft deliveries. The positions are being remarketed in parallel in case that is not possible.

ATR plans to deliver around 80 aircraft, a similar number as in 2017. Scherer said at the Farnborough Air Show that “there could be a slight impact” if Iran Air aircraft have to be reconfigured before delivery to another customer.

Based on several factors, Scherer expects a resurgence of the turboprop markets. He believes consumers are becoming more aware of the environmental footprint their travel causes “and our aircraft use 40% less fuel than the nearest competitor.”

He sees significant potential in the freighter based on the FedEx order for up to 50 package freighters. “That has sparked a lot of interest in the market, a lot more traction is expected in the freighter market,” he said.

Also, Scherer anticipates a resurgence of the 50-seat turboprop. ATR is near committing to the short takeoff and landing (STOL) version of the ATR 42, which would allow airlines using smaller aircraft to fly it into airfields with short runways. More generally, Scherer is convinced that the low operating costs allow airlines to replace smaller ageing aircraft such as Saab 340s and not increase the overall cost.

Bombardier’s renewed focus on the regional market following the CSeries takeover by Airbus “could be good news for all of us,” Scherer said, as more players promote the advantages of regional aircraft. He played down the idea of a possible re-engining of the ATR because the aircraft is already highly fuel-efficient in his view.

One big opportunity the ATR CEO sees is the Chinese market where he estimates his company could place up to 300 aircraft in the next 20 years. Currently, the 600 series is not certified in China, but Scherer hopes Chinese authorities certify the aircraft before the end of this year. EASA and CAAC are currently in talks over a bilateral aviation safety agreement that would foresee full reciprocal recognition in the long term. Scherer believes China could use the pending ATR application as a tool to speed up a deal. “I accept that and am not complaining.”

He does not see the existence of the Avic MA-60 as a disadvantage. Having a Chinese program competing could ease the pressure on a player like ATR to “artificially” place part of its production into China in return for market access when that is not justified by volumes.