ATR Expects to Hold Production at 80 Planes a Year

European turboprop maker ATR expects to hold production at around 80 planes a year to help stabilize pricing for its aircraft at a time when the company is also exploring a legal restructuring to gain more independence from its joint-venture partners Airbus SE and Leonardo SpA.

The legal framework change would see ATR transition from a consortium structure to a limited liability company, a move that would give it more flexibility on industrial decisions and hiring, ATR Chief Executive Christian Scherer said. No change in the 50-50 ownership structure was anticipated as part of the change.

"A new company structure would be more agile and dynamic," Mr. Scherer said, adding that no decision has been taken on whether to pursue the legal restructuring.

The new arrangement could help pave the way for a new aircraft program, he said, including by bringing in new investors. ATR has long had ambitions to build a 90-seat plane, though shareholders have not green-lighted the investment.

Additionally, Mr. Scherer said that after a raft of ATR plane orders, including from leasing companies that have to place them with airline customers, there is an "overhang" in the used aircraft market. That, he said, is detrimental to airlines or the people that finance planes.

The company produced 80 planes last year but once had ambitions to build more than 90 aircraft a year. The 80 plane figure "is the right flight level for us," Mr. Scherer told reporters at the Dubai Air Show.

Supplier headaches are impacting output, he said, but handover targets this year should be made.

At that production rate, ATR this year could end with a book-to-bill ratio of about 1.5, Mr. Scherer said adding that 2017 is looking "very good." The plane maker recently agreed an order from FedEx Corp. for up to 50 cargo planes valued at around $1.3 billion.

Though the FedEx planes are new, Mr. Scherer said it could also spur cargo conversions, further easing pressure on the value of used planes.

Write to Robert Wall at robert.wall@wsj.com

(END) Dow Jones Newswires

November 14, 2017 03:47 ET (08:47 GMT)