Daily Archives: March 15, 2014

Turboprop market vs. oil price (ATR figures 2013 update)

Few weeks ago, the Toulouse-based aircraft manufacturer ATR (Avions de Transport Régional) published a press release reporting some of its numbers from 2013 exercise (being a private company, owned by Airbus and Alenia, it does not publish full financial annual report). Some of the key figures were:

  • Revenues increased 13% to 1.63bn$.
  • A new record of 74 deliveries (+16%).
  • Sales of a total of 195 aircraft (89 firm orders and 106 options). (1)
  • Backlog at year-end of 221 firm aircraft orders.

About 3 years ago, I wrote a post, “Turboprops market different dynamic“, in which I discussed:

[…] how civil turboprop market is unrelated to the larger and more known turbofan civil aircraft market and how its dynamics are completely unrelated to World GDP growth and thus world air traffic growth. […]

When calculating correlation between the different variables, I discovered that the correlation between GDP and deliveries is rather low, despite of the time lag applied (be it 2, 3, 4 years…). However I found that the oil prices and deliveries did correlate very well with a lag of 5-6 years, yielding coefficients of 0.55-.65, which are rather high.

I wanted to update the calculations I made then with the information of the last years.

ATR deliveries vs. GDP growth and oil price (2013 update).

ATR deliveries vs. GDP growth and oil price (2013 update).

With the last years’ data, correlations are similar:

  • Between oil prices and deliveries: high, above 0.54 from 1 year time lag, increasing through 6 years time lag (when it reaches a maximum of 0.77).
  • Between GDP growth and deliveries: low, not more than 0.26, and negative correlations up from 1 to 4 years time lag.

If there was causality, we could infer that the from the moment that oil prices are computed, till they are taken into regional airlines’ models, the fleet planners identify the need for new turboprops, the case is approved by airlines’ management, discussions start with ATR, negotiations are closed between the airline and the manufacturer, the aircraft are built and delivered to the airline… it takes about 6 years. (2)

(1) 15 cancellations (4 ATR-42 & 11 ATR-72) that took place in 2013 go untold in the press release, though they are easily deduced comparing orders and backlogs for 2013 and 2012.

(2) About 3 of those 6 years are consumed from placing the firm order to getting the aircraft delivered, as we can see by the current figures of backlog (221 a/c) and yearly deliveries (74 a/c).

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