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ATR urges owners to approve new aircraft

By Siva Govindasamy

PARIS (Reuters) - Aircraft manufacturer ATR is pushing its owners to approve plans for a new 90-seat turboprop plane to provide cut-price competition to smaller passenger jets, its chief executive said at the Paris Airshow.

The company, a joint venture between Airbus parent EADS and Finmeccanica subsidiary Alenia Aermacchi, manufactures the 50-seat ATR 42-600 and the 78-seat 72-600.

Earlier this year, it launched a study into producing a cheaper alternative to jets made by companies such as Embraer of Brazil and Canada's Bombardier .

Talks between EADS and Alenia on the financing of the aircraft are ongoing, with company officials telling Reuters that the European consortium may be balking at the potential investment.

ATR chief executive Filippo Bagnato has urged the shareholders to give the go-ahead, saying this would be a "very important" development for the joint venture.

"We are targeting both the lower end of the jet market and new customers," said Bagnato.

"ATR has a 65 percent market share in the 50-90 seat market, and our products are becoming more popular because maintenance and fuel costs are very important drivers. The difference in operational costs between 70-seat jet aircraft and our aircraft is half, and we can bring that to the 90-seat market."

Turboprop aircraft fly more slowly than jet aircraft, but their lower operating costs mean that they are increasingly popular in growth markets such as Southeast Asia and Latin America. Bombardier's Q400 is ATR's main rival.

The manufacturers of jet aircraft were also creating space for ATR by moving away from the smallest segments and adding passengers in their larger aircraft to reduce the average operating cost for their customers, added Bagnato.

Embraer, for example, announced on Monday the newer variant of its E-195 would be able to carry more passengers and that it would drop its smallest E-170 from its line-up.

Bagnato said ATR hoped to introduce the new aircraft to the market in 2019, which meant it needed to get the go-ahead around 2014.

"We need five years to work on the development and testing before delivery," he added.

(Editing by Mark Potter)

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