ATR Sticks To Production Growth In Spite Of Temporary Demand Softness

FARNBOROUGH, England—ATR has noticed some softness in its discussions with potential customers as uncertainty continues around the economic impact of the Iran war.

 

“We have had 14 orders since the beginning of the year, [and] we were expecting a bit more in the first half of the year, to be honest,” ATR CEO Nathalie Tarnaud Laude told Aviation Week on the sidelines of the Farnborough Airshow here on July 20. “Very advanced discussions have been slowed down a bit,” she says. “Customers have been looking at what is happening, [and] some wanted to protect their balance sheets, others needed less connectivity,” as they reduced long-haul capacity, Tarnaud Laude adds.

 

Tarnaud Laude says there were no cancelations and discussions have started to pick up again. She predicts that order activity will accelerate in the second half of the year. ATR is sticking to its target of reaching the same number of firm orders (50) as in 2025—or even exceeding that level.

 

The temporary demand softness has no effect on ATR’s ramp-up plans. The manufacturer targets at least a 20% production increase over 2025, when the company delivered a disappointing 32 aircraft, which fell well short of its target of 40.

 

“We are really confident that we can achieve [the 2026 target],” Tarnaud Laude says. In 2025, “the supply chain was very tough, [and] it is still fragile, but we see some improvements.” The number of missing parts is now at one-third of earlier levels.

 

ATR wants to build on the planned 2026 growth and go to 60 or more deliveries by 2029. Tarnaud Laude says that the growth is “very much sustained by market demand” and suppliers are backing the plan, too.

 

ATR has been at a rate of four aircraft per month in the first half of the year and aims to reach rate five on a sustained level in the second half. Then, further increases are to follow.

 

The company reopened the northern final assembly line earlier this year, which has been dormant for several years. The line provides capacity for production growth and also allows it to pull aircraft off what is now the main line in case any work has to be performed again.

 

The time needed to install parts out of sequence has been reduced by 40% since the beginning of the year—a phase typically added to the process after the aircraft exits final assembly. Tarnaud Laude wants that extra work to come down to just two weeks, though that will likely only be achievable next year.

 

At the same time, its parents and main suppliers—Airbus and Leonardo—are fine-tuning their own supply chains, sometimes adding a second source for their work share or even changing suppliers. But “completely changing the flow is not yet on the table,” Tarnaud Laude says.

 

Also, ATR has no plans for additional versions of the aircraft beyond the 42, the 72 and the freighter. “We need to focus. The more versions you add, the more complex you make it,” Tarnaud Laude says. “Our priority No. 1 is to deliver and ramp up. You really need to stick to the product line that you have.”

 

More industrial cooperation with India remains a possibility, she says, but: “We first try to sell aircraft. We believe our aircraft very much fits the Indian market.” A large order potentially in the hundreds of aircraft would be difficult to accommodate in Toulouse without massive investment and could provide an opportunity for placing more work into India.

 

But with senior management changes imminent at IndiGo and Air India, “we need to give people time to settle down and review their own strategies.” On the other hand, ATR is working on other prospects in the country beyond the two largest airlines.

 

Separately, Tarnaud Laude assumes that Deutsche Aircraft will certify the 328eco and create new competition. “They will be certified for sure—we are not entirely clear when,” she says. She cautions that the 40-seat market is only a niche for ATR, with the bulk of demand for the larger ATR 72. However, the smaller version often is the “entry point” for airlines to move to the larger aircraft at a later stage.