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ATR CEO Sees Production Cuts on the Horizon
Following the lead of other major manufacturers in the aviation sector, Franco-Italian aircraft builder ATR has started laying the groundwork for its own slowdown of construction of new planes as the coronavirus continues to plague the industry. The aircraft manufacturer’s CEO Stefano Bortoli commented on the matter in a Reuters interview.
“Of course we are going to reduce; we will see later how much,” the executive said, waiting to see how demand impact that designers current production rate. ATR delivered 68 aircraft last calendar year, which was a noticeable decline from the 76 planes that took to the skies in 2018.
ATR has struggled with finding its footing in the commercial sector, slowing deliveries as orders slowed. However, the latest edition of the ATR 72 might just keep production moving for the moment. The company plans to launch the ATR 72-600F, the freighter version of the passenger plane for use by FedEx. There has been no mention of the delay, especially since cargo aircraft are in high demand in the current marketplace.
The Airbus company has already enacted a ‘force majeure’ clause for aircraft deliveries, citing that the current market will result in some delays even if the airline still expects the plane to be delivered as requested.
The lineage of the propeller-driven aircraft has lived well past its hay day and currently sits in a market where ATR is the dominant force in the commercial sector. The company no longer faces direct competition from former Dash 8 builder Bombardier but still struggles to pull in orders as regional jets from Embraer and other companies provide jet alternatives to the Toulouse-based company’s designs.
ATR sold 79 aircraft in 2019, which was a slight uptick from the 52 orders that were placed the year prior. The aircraft constructor claims that it does see a silver lining for the company when demand returns, seeing the slow start as a way to get the ATR traction in the current market.
“The first flows will be domestic flows which include regional ones,” Bortoli said.
ATR will continue to wait out and see what cuts are necessary before enabling a strategy to workaround. The builder expects to make its first move in the next few weeks.
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