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ATR sets sights on China

02/15/2016| 10:54:36 AM|

Franco-Italian turboprop manufacturer ATR would like to expand further in China particularly for its 50-to-78-seat turboprops to find their first customers in the country.

ATR (Stand E01) is here with a strong presence in the region, but one it would like to expand further - especially in China. Late last year the Franco-Italian turboprop manufacturer opened a representative office in Beijing, estimating the time is right for its 50- to 78-seat turboprops to find their first customers in China. ATR has long complained that China is not an open market, notably due to prohibitive tariffs.

The company's new Beijing office, located at Tianzhu Airport, is headed by v-p sales and chief representative in China, Wang Qi. "We have hired three former Airbus salesmen - they are Chinese and have a wealth of experience in aircraft sales," ATR CEO Patrick de Castelbajac told AIN. Airbus, which has 300 employees in Beijing, is fully supporting ATR through its established relationship with Chinese authorities, Castelbajac added. Formerly, ATR had only one representative in China, and he did not speak Mandarin. "We should not complain, we must convince," Castelbajac asserted during a recent press conference in Paris.

Some 2,600 commercial aircraft are flying in China, of which 68 are considered regional aircraft with a capacity of less than 90 seats. Fewer than 20 of those are turboprops-specifically, AVIC MA-60s. The remainder consist of Bombardier and Embraer jets, according to Castelbajac. "But there is no reason why the regional-aircraft fleet should account for [only] 5 percent of the total in China, against 25 percent worldwide," he said.

ATR executives believe many of the routes currently flown do not need a 150-seat aircraft. Yet, many small cities are, nevertheless, believed to warrant direct airline service. Such routes may not be found on the densely populated coastal areas but rather in areas like Inner Mongolia. This is the kind of place where ATR salespeople estimate they have the best chances to place their aircraft.

The Civil Aviation Administration of China (CAAC) does not know a lot about ATRs, and turboprops have a bad reputation in China, Castelbajac conceded. The civil aviation authorities of Indonesia and Myanmar in 2013 ordered the grounding of Merpati Nusantara Airlines' and Myanmar Airways' MA-60 fleets for airworthiness checks following a series of accidents. Shortly after, New Zealand sparked a controversy when it warned its nationals in the Pacific island country of Tonga against flying on an MA-60 operated by Real Tonga airline.

Castelbajac did not refer to the grounding or the controversy, but said he intends to demonstrate to the CAAC and Chinese airlines that ATRs are safe and reliable. He believes the environment friendliness of ATR aircraft -- burning an estimated 50 percent less fuel per passenger-mile than a jet -- will help convince Chinese operators and a country where environmental issues have recently become more important.

Asked for a sales objective, he suggested one or two ATRs might be sold this year in the country. "But once the airlines see the aircraft in service, a lot will follow," he predicted.

Import tariffs had long been cited as an obstacle. Duty and VAT, combined, are still higher for aircraft weighing less than 25 metric tons. However, airlines may now amortize those costs over several years.

Despite the lack of any orders from China, Asia still accounts for 51 percent of ATR's backlog, and more than 350 ATRs are flying in the region. ATR also has Chinese suppliers in its network, such as AVIC, which manufactures 20 percent of the fuselage.

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TAGS: ATR | Airport | CAAC | China
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