ATR bets on Phl islands to drive turboprop growth

Blagnac-headquartered ATR, the world’s leading manufacturer of regional turboprop aircraft, is optimistic about the Philippine market.

On the sidelines of the Singapore Airshow, I had a chance to chat with company executives Jean-Daniel Kosowski, aircraft sales director and Jean-Pierre Clercin, managing director and head of Region Asia Pacific.

While they weren’t exactly enthusiastic about the looming transfer of all turboprop flights out of NAIA by March, they said the move would eventually create new markets for turboprops in the country.

“If you want to go from point A to point B in the Philippines, you need to take the bus, then the ferry, then the bus again. And so sometimes, it’s actually better just to take the direct flight. So that’s what ATR stands for. It’s connecting small communities in that sense,” Jean-Pierre told me and another visiting Filipino journalist, Miguel Camus of InsiderPH.

That’s why, Jean-Pierre and Jean-Daniel added, we see a huge potential in the market.

At present, there are 26 ATR aircraft operating in the Philippines, mostly the newer model ATR 72-600. Operators include Cebu Pacific, Sunlight Express, AirSwift, etc. This is according to data provided by Francis and Low Pte. Ltd, ATR’s public relations partner.

In all, ATR sees enormous potential to sell more ATRs to the Philippines, because it is an archipelago with more than 7,000 islands, some of which aren’t connected yet.

Many of these islands have short runways that are inaccessible to jet aircraft, the two executives said.

But the Department of Transportation plans to extend these runways to accommodate bigger jets. ATR is unfazed about this plan, saying that turboprops will always have a role to play in an archipelagic country like the Philippines.

Turboprops will continue to be the first aircraft that would help operators gauge or build up the traffic, Jean-Pierre said.

“You build up the traffic. People get the habit of getting there on the plane. When you have more and more load factors, eventually you will need a bigger aircraft. And so yes, you need a bigger runway as well,” he said.

When that happens, ATR will no longer be needed in that runway but it can go into other places and develop a new market.

“That’s the fate of the ATR,” Jean-Pierre said.

After our chat, I realized that turboprops, in a sense, can actually be market builders, cultivating passenger habits and traffic flows that may later justify bigger infrastructure investments.

For example, if an airline like Cebu Pacific or Sunlight would like to try a new route, they can definitely start with a smaller plane and if demand grows, the operator will add more flights until eventually, demand is big enough for a bigger jet.

Against this backdrop, the company notes that turboprops are not confined to short or narrow runways alone or to smaller airports. Around the world, ATR aircraft also operate from major airports, supporting or complementing usual flights of bigger airplanes. A lot depends on demand patterns in these routes.

For instance, there may be some routes that require jets during peak hours and smaller island planes when demand is  slower.

Both Jean-Daniel and Jean-Pierre note that rising travel demand is also tied to broader economic trends. More and more Filipinos want to travel faster and in a more convenient way, particularly those in smaller cities.

Apart from this trend, ATR executives believe that regional aviation can complement other infrastructure investments.

The company sees evolving airport strategies within Metro Manila as an opportunity.

For example, they are optimistic on the long-discussed Sangley Point airport in Cavite, saying this could create fresh network possibilities.

Actually some ATR aircraft already operate limited flights in the gateway, largely for cargo or special services, and executives say such locations could be well suited for regional operations.

A proposal to develop Sangley into a major alternative airport to NAIA is still pending.

At the Singapore Airshow, I also got a glimpse of the ATR HighLine, a new product – a cabin interior more similar to what you would find in a business jet rather than a commercial airliner.

Imagine flying on an all-Business class configuration. That is what an ATR HighLine can offer. I tried the mock-up at the Singapore Airshow and it really felt comfortable and convenient.

With its style and comfort, the ATR HighLine could be ideal for high-end resorts in the Philippines.

Malaysia’s Berjaya Air will take delivery of a HighLine cabin within the quarter. Berjaya Air will be operating the aircraft on behalf of Berjaya Hotels, which has high-end island resorts.

Within Asia-Pacific, Indonesia remains ATR’s largest market by a wide margin, followed by India.

Aircraft in the Philippines depend on what operators need. Cebu Pacific wants a higher-density configuration, prompting ATR to develop a 78-seat version.

But the Philippines has room to expand as domestic travel continues to grow, the ATR executives told us during our visit.

In all, the future looks bright for regional aviation in the Philippines, with players like ATR noting that the archipelago still has many small and medium-sized cities scattered across water that need connectivity.

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