Operating in an aftermarket worth an estimated $18 billion up to 2027 by Aviation Week, Toulouse-based manufacturer ATR has predicted demand for just over 3,000 new turboprops over the next 20 years.
Of that total, about 40% is to replace existing aircraft and 60% to satisfy growing demand. Obviously, the latter figure is the more speculative, so it is worth examining ATR’s underlying assumptions about how the market will develop between 2017 and 2037.
Firstly, it assumes that average annual traffic sustains growth of 4.5%, which it has done, more or less, since 2010.
However, 4.5% is a global figure; things look very different if one looks at some of the regional markets that ATR might expect to sell into.
The U.S. Regional Airlines Association, for example, reports almost zero growth in revenue passenger miles for its members since 2010. The European market is even worse: according to trade body ERA, the number of flights by European regional airlines fell from 1.54 million in 2013 to 1.36 million in 2017.
This leaves the Asian market as the key driver for growth deliveries of new turboprop aircraft, and this is reflected in ATR’s forecast: the manufacturer expects the turboprop fleet in China and the rest of Asia to grow from 750 aircraft in 2017 to 1,715 by 2037. This regional growth is also reflected in the MRO segment, with Asia-Pacific estimated by Aviation Week forecast data to account for $7.7 billion over the next decade - more than double that of the second place Middle East.
In Europe and the United States, in contrast, which operate more than 400 ATR aircraft combined in 2018, it only expects about 200 more turboprops to be in service over the next 20 years.
Hanging over such an analysis, though, is what happens to Asian regional carriers as the market matures: do they get squeezed out by low-cost carriers and other transport modes in a similar fashion to their European and U.S. peers, or will Asia’s fragmented landmass protect them?
ATR’s other big assumption is that the price of oil doubles in the next 20 years, pushing airlines towards more economic turboprop aircraft.
It’s anyone’s guess whether that transpires and how steadily any such rises occur, but if ATR is correct, it will at some point need a new turboprop engine to offer enough efficiency gain over the latest narrowbody and regional jet technology.