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Turboprop maker ATR clinches U.S. comeback with FedEx order

By Tim Hepher, Sudip Kar-Gupta / / November 8th, 2017

PARIS (Reuters) - ATR, the world’s largest maker of regional turboprop planes, on Wednesday announced an order from FedEx Express for at least 30 newly designed 72-600F freighter models, sealing its return to the lucrative U.S. market for the first time in over two decades.

FedEx planes on the tarmac during the presentation of the future extension of the FedEx hub in Roissy-en-France, North of Paris, France
October 18, 2016. REUTERS/Philippe Wojazer

The aircraft will be the first to be delivered by the Franco-Italian planemaker in a brand-new freighter configuration rather than as passenger planes, a move that may also boost the recently lacklustre second-hand market for its turboprop fleet.

ATR, a joint venture between Airbus (AIR.PA) and Italian company Leonardo (LDOF.MI), said the FedEx order comprised firm plans to buy 30 of the planes, with an option to buy another 20.

Deliveries will begin in 2020, it added.

ATR earlier this year reported a preliminary deal to supply 20 aircraft to Fort Lauderdale-based Silver Airways, but the FedEx deal marks its first firm contract in the world’s largest aviation market and involves a marquee customer.

“It is an important deal for ATR which has been cooking for some time,” a person familiar with the negotiations said.

“Having a freighter program also opens a greater perspective for the second-hand market,” he added. Passenger jets often get recycled as freighters after years in service.

The U.S. breakthrough follows tentative deals announced at the Paris Airshow earlier this year to sell ATR turboprops to China, which is on course to overtake the U.S. as the world’s aviation powerhouse and is developing its own rival turboprop.

Brazil’s Embraer (EMBR3.SA) has also expressed interest in returning to the market for turboprops, which tend to be more efficient than some jets over short distances.

ATR’s only significant current competitor is Canada’s Bombardier, whose Q400 it outsells by around three to one. Bombardier has said it is confident of increasing its 25 percent market share.

The U.S. deal is a victory for ATR chief executive Christian Scherer, who was appointed a year ago with plans to expand the European company’s footprint.

Industry sources say the Airbus veteran was involved in a previous assault on the U.S. market via FedEx in the 1980s, when the then struggling European company struck a tentative deal to sell 24 unwanted jets to the U.S. package firm.

That deal was never completed and Airbus later secured a foothold in the U.S. by offloading half of the jets to PanAm. - 24/7 Support including Chat
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