CONNECTING

THE FUTURE

Turboprop market
forecast 2018-2037

atrbroadcast atraircraft atraircraft atr atrchina

 introduction

The competitive environment of regional aviation is

showing its utmost importance for developing local
economies and territorial cohesion. It not only feeds
hubs, but more importantly, it allows connections to the
world’s regional capitals.
Everyone likes fast and easy trips from a nearby airport.
Not only do turboprops offer the right capacity and
technology, they also reach places where no other aircraft
can go: more than one third of the world’s commercial
airports rely exclusively on turboprops.
As new regions emerge, new regional routes will be
opened and developed. This is another mission at which
turboprops excel.
By efficiently connecting such a large diversity of
communities, with the most limited environmental
footprint, turboprops are revealed as the most efficient
choice to quickly enable and sustain economic
development of many regions.
Looking 20 years ahead requires us not only to study the
past and the world today but also to imagine the networks
that will shape our future.

Christian Scherer
Chief Executive Officer ATR
TABLE OF
CONTENTS

06
EXECUTIVE
SUMMARY

12
RATIONALE

16
REGIONAL
TRAVEL TRENDS

28
BENEFITS OF
REGIONAL AVIATION

38
FORECAST
BY REGION

56
FREIGHTERS
 Executive Summary ExecutiveSummary
Executive Summary
CAPACITY
TRAFFIC GROWTH ROUTES CREATED BY TURBOPROPs

AVERAGE ANNUAL TRAFFIC GROWTH New turboprop routes

ACTUAL Forecast

9%
30% 6%
New 12%
25%
Routes
7%
11%
15% 16%
70%
Existing
network

Africa &
300 Middle East 200 South Asia
2007
2009
2011
2013
2015
2017
2019
2021
2023
2025
2027
2029
2031
2033
2035
2037

330 North America

690 China

Latin America
410 & Caribbean
Central Europe,
240 Russia & CIS
440 Asia Pacific 160 Western Europe

+3.2% +4.5% 30% +2,770

of 2037 activity comes potential new
GDP TRAFFIC from new routes routes created

8 9
 Executive Summary ExecutiveSummary
Executive Summary
CAPACITY
TURBOPROP DEMAND TURBOPROP DEMAND by region

TURBOPROP Fleet Evolution and deliveries Turboprop deliveries

In-service passenger fleets

4,060 3,020

 Growth
1,800
60%

deliveries
2,260

 Replacement
1,220
40%
In service

 Stay in Africa &

service 350 Middle East
1,040
260 South Asia
350 North America
2017 2037
300 China
Latin America
420 & Caribbean Central Europe,
250 Russia & CIS

350 Western Europe

740 Asia Pacific

3,020
deliveries

Fleet growth is envisioned to account for 60% of

turboprop deliveries in the next 20 years.

Most of this growth is driven by the creation of new routes

as part of airlines’ network development strategies.
630 2,390
The other part relates to the expanded usage of the 40-60 SEATS 61-80 SEATS
turboprop technology in pre-existing markets.

10 11
 RATIONALE EXECUTIVE SUMMARY
RATIONALE
ASSUMPTIONS
CAPACITY METHODOLOGY

ASSUMPTIONS FORECAST STREAM

The following assumptions and definitions apply unless

otherwise specified: Aircraft
allocation
ASK: Available Seat Kilometer – seats multiplied by
CURRENT & CURRENT &
distance. HISTORICAL HISTORICAL
GDP: Gross Domestic Product considered in this NETWORK TP FLEET
document at Purchasing Power Parity.
Mature markets: North America, Western Europe, Japan,
South Korea, Australia, Singapore, Chinese Taipei, Hong
Kong, New Zealand & South Africa.
Turboprop in-service fleets are considered in the range of Macro-economic Retirement
20-80 seats in standard configuration. & demographic & conversion
forecast
Network range up to 900 NM ~ 1,700 km ~1,000 mi.
Route size considered: up to 450 daily seats each way per
carrier.
Traffic allocation to all types of existing aircraft categories
from 20 to 200 seats, jet and turboprop technologies.
Deliveries include aircraft currently in-production and TP Fleet
Replacement
launched programs. NETWORK staying
demand
EVOLUTION in service

DELIVERIES
Allocated
to TP
Sources
• ATR Studies and survey
• Flightglobal
• IATA NEW Growth demand
Larger ROUTES
• OAG Capacity
• Oxford Economics
• US Department of Transportation
• US Energy Information Administration

14 15
 regional travel trends regional travel trends
FUEL TRENDs upward Higher Fuel Price in Regional Airports

Oil price evolution Difference in fuel price between main

airports and regional airports

Forecast

x2

fuel price
1998
2001
2004
2007
2010
2013
2016
2019
2022
2025
2028
2031
2034
2037

differences

Data: US Energy Information Administration/ Haver Analytics

No difference Average Over 100%

difference difference

Blank: no data +34%

In a context of economical growth, oil price is expected Fuel price is higher in regional airports than in main
to double in the next 20 years, regardless of temporary airports due to higher fuel transportation costs, which
fluctuations. translates to a worldwide average extra cost of +34%.

Fuel price will again be a key decision factor for airlines. Turboprop technology limits airline exposure to this
additional volatility.

18 19
 regional travel trends regional travel trends
different PROPENSITies TO TRAVEL key GROWTH CONTRIBUTORS

Seats flown vs Wealth per capita TURBOPROP MARKET MECHANISMS

Total seats
Regional seats /
thousand inhabitant Upsizing to larger capacity aircraft
Growth of remaining network
Route creation
2000 2037
+4.5%
1.00 TRAFFIC GROWTH
10,000 20,000 30,000 40,000 50,000 60,000
+3.0%
GDP per capita
2037

2037
+3.5%
0.10
2000 -2.0%
2000

0.01

Advanced
Emerging average
Developing
Advanced
Emerging countries in 2017
Developing 2017 2037

As middle-class and consumer spending increase in Creation of new routes will outpace upsizing to larger
many regions, the propensity to travel will develop - with aircraft, and will contribute 2/3 of total growth for the
new emerging regional markets taking the lead. next twenty years.

It has been observed recently that people in countries

with a strong turboprop presence have a 40% higher
propensity to travel regionally.

20 21
 regional travel trends regional travel trends
ROUTE CREATION intensifies strong CONTRIBUTION FROM NEW ROUTES

Number of regional routes created Seats flown on routes created since 2002

+33% route creation

period

2012-2017
China
Asia Pacific 2007-2011
excl China 2002-2006
Latin America
& Caribbean
Africa
& Middle East
Europe & CIS
North America

2002-2006 2007-2011 2012-2017

2002 2007 2011 2017

The bulk of growth comes from the Asia-Pacific region.

Europe is once again creating routes while simultaneously
growth in China is gaining momentum.

58%
of the current regional
21%
of current regional seats
network has been created come from routes created
in the last 15 years in the last 15 years

22 23
 regional travel trends regional travel trends
New regional markets TURBOPROP: the proven optimal
are yet to emerge choice for short haul

Regional networks maturity stage Share of Turboprop vs Regional Jet

100%
Rest of the world
World average
United States

75%

50%
330 NM

25%

Maturity
stages

0%
Regional aviation activity
Early stage Mature 100 200 300 400 500 600 700
per inhabitants
(NM)

Blank: no data

Although some are very well populated, many countries

still have poor regional connectivity, contrasting with Turboprops are airlines’ preferred choice worldwide for
mature European and North American markets. distances up to 330 NM.

Leveraging turboprop advantages (cost efficiency, access There is a substantial fleet of legacy regional jets in
to challenging airfields), these countries will contribute the United States leading to the contrast between this
to the bulk of market growth while developing the country and other regions.
economies of secondary and tertiary cities.

24 25
 regional travel trends
regional travel trends
Turboprops: the way to reduce
TURBOPROPs ARE MORE SILENT
regional aviation emissions

Potential emission savings by replacing EFFECTIVE PERCEIVED NOISE IN DECIBEL (EPNDB)

regional jets with turboprops

TP Similar size RJ
tonnes

11%
Chapter 3 limit
(1978)
Up to of
876,000 overall regional aviation -10dB
emissions saved
Chapter 4 limit
Current generation (2006)
regional jets
-7dB
1,095,000 Chapter 14 limit
9dB margin (2020)

Future noise limit?

Future regional
jets (EIS 2021)
1,168,000
CO2 annual savings by replacing
jets on routes up to…
400-500 NM Today’s environment noise regulations are getting more
300-400 NM and more stringent.
949,000
200-300 NM With their remarkably low noise signature, turboprop
Up to 200 NM aircraft are the benchmark with a strong margin to 2020s’
ICAO standards.

Turboprops’ low noise footprint allows operations at

airports located in city centres that impose strict sound
levels, like London City or Stockholm Bromma.
Assuming all short haul flights operated by regional
jets today are replaced by modern turboprops, 11% of
overall regional aviation CO2 emissions could be saved.
Turboprops are
These 4,100,000 tonnes of CO2 overall regional aviation already meeting
emissions are equivalent to the annual absorption of future standards
200,000,000 trees.

26 27
 benefits of regional aviation
benefits of regional aviation Executive Summary
CONNECTING LOCAL COMMUNITIES AIR CONNECTIVITY SUPPORTS
CAPACITY LOCAL DEVELOPMENT

Airports SERVED exclusively BY regional Economic Impact of Regional Aviation

aircraft

50%
Airports relying
More More
Social Development Employment
exclusively on
regional aircraft

3,800+
commercial
airports

36% +5% +6% +8%Foreign

Airports relying
exclusively on Tourists Regional GDP Direct Investment
turboprops

Many communities rely on regional aircraft to connect

to other countries and regions in the world. Through an
adapted technology and capacity, turboprops efficiently
answer this essential market need. +10%
Turboprops are the benchmark as they provide specifically
FLIGHTS
adapted economics for the average worldwide route Generates
length of 300 NM.

Furthermore they ensure accessibility to all airfield
profiles and are the lifeline of many communities.
Either through tourism development or by establishing
business, interlinking secondary and tertiary cities allows
every community to be connected and benefit from
world economic growth – a key component of sustainable
development.

30 31
 benefits of regional aviation benefits of regional aviation
Executive Summary
Turboprops complement VALUABLE TIME SAVING OF
CAPACITY
ground transportation AIR CONNECTIVITY

Different solutions for different schemes Average time benefit of air vs ground
transport
From surface ... ... to air transport

Manila Manila
1h30
1h30
10h

Kalibo
Kalibo

  


11h30 1h30

from dense air traffic... ... to high speed train

with large capacity and regional aircraft

Paris Paris

Average difference between flight-time

1.5h and ground transport time over all city-pairs >10h
Nantes Nantes

Blank: no data

Turboprops provide a valuable travel solution which Depending on ground infrastructure and/or geographical
qualitatively complements any alternative mode of constraint, the time saved flying regionally is highly
ground transportation. valuable to travellers.

Not only turboprops provide travelers accustomed to Moreover, regional air transport is a quick enabler of
slower modes of ground transportation with the comfort economic development as it requires shorter lead-time
and convenience of extra speed, but they also maintain to implement connectivity.
essential air connectivity on previously dense routes
where flows have reached levels that allow high speed
trains to ‘dry out’ air traffic.

32 33
 benefits of regional aviation
Executive Summary
benefits of regional aviation
Lower competition on
CAPACITY FIRST MOVER ADVANTAGE
regional routes

COMPETITION FORCES VS TRAFFIC VOLUME Yield difference in regional routes

depending on number of operators

Average
number
of carriers
+3%
Trunk routes

-38%
Regional routes
-44%

Route
opening 1 operator* 2 operators 3+ operators
20 140 260 380 500 620 740 860 980
Seats flown
daily each way *
after one year since route opening
Emerging markets
World average
Europe
North America

Regional networks tend to be operated by fewer carriers
than routes with larger traffic volume.
This “blue ocean” provides a wealth of opportunities to
get away from the cash-intensive competition on main
routes
Opening a route offers a dominant competitive position
that eventually leads to a higher yield when the route is
mature. However, the entry of new competitors has an
adverse effect on total revenues.
Turboprops, as typical first movers, offer higher rewards
for exploring new routes and developing regional
networks.

34 35
 benefits of regional aviation benefits of regional aviation
Executive Summary
AFTER ROUTE OPENING: Advantages of high frequencies
DIFFERENT GROWTHCAPACITY
PROFILES with turboprops

AVERAGE ROUTE GROWTH PROFILES Leveraging schedule flexibility

MAIN CLUSTERS BY GROWTH POTENTIAL

(% of total new routes)

High (8%)
Medium (11%)

Weekly
Intermediate (20%) Flexibility  
flights Low to Intermediate (26%)
Low (30%) Higher yield  
56
Protect
 the market  
49
High frequency Low frequency
42
Small module Large module
Growth potential

35

28

21

14
Operating high frequencies with turboprops offers a
competitive advantage to airlines:
7
• Adapt to peaks of demand with a flexible offer and
 strategic utilisation of slots
0
Year 0 Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 • More choices for business passengers, which allows
20% higher yield than low frequencies
• Protect the market by blocking the entry of new
operators.
There are various patterns of new route development,
ranging from fast growing routes likely to welcome
single-aisle capacity within a few years, to flows whose
growth is capped due to more limited traffic potential.

36 37
 FORECAST by region Executive Summary
FOCUS ON Africa & Middle East
CAPACITY

Turboprop 70

Turboprop 50

260
90

350
DELIVERIES

+3.5% +4% 300

GDP GROWTH TRAFFIC GROWTH NEW ROUTES
TURBOPROPs in service

The Africa & Middle-East region is the largest and most

versatile region, but the poorest in terms of road and
460 railway infrastructure.

300 Many ageing 30-50 seater aircraft are costly to operate

and need to be replaced.

Modern turboprops are the easiest way to an immediate,

safe and affordable regional connectivity, which answers
2017 2037 accessibility challenges and supports local economies.

40 41
 FORECAST by region Executive Summary
FOCUS ON North America
CAPACITY

Turboprop 70

Turboprop 50

240
110

350
DELIVERIES

+1.7% +2.2% 330

GDP GROWTH TRAFFIC GROWTH NEW ROUTES
TURBOPROPs in service

With many inefficient 50-seater jets left over from the 90s
555 and the subsequent average capacity growth, US regional
aviation has failed to maintain many air links. Modern
430 turboprops can restore connectivity by replacing ageing
30-50-seaters and providing an efficient alternative to a
5-6 hour drive.

In Canada, with their enhanced performance, modern

turboprops will access more communities and extend
2017 2037 the essential air service required.

42 43
 FORECAST by region Executive Summary
FOCUS ON Latin America & CAPACITY
Caribbean

Turboprop 70

Turboprop 50
350
70

420
DELIVERIES

+2.4% +13% 410

GDP GROWTH TRAFFIC GROWTH NEW ROUTES
TURBOPROPs in service

525 Turboprops are a proven strategic component for airlines

to offer access to an extensive network in Latin America
at suitable economics. Growth will come from connecting
230 communities to economic recovery.

Essential for the tourism and socio-economic
development of the Caribbean, turboprops will remain
2017 2037 the island hopper benchmark for sustainable air links.

44 45
 FORECAST BY REGION EXECUTIVE SUMMARY
FOCUS ON ASIA PACIFIC
CAPACITY

TURBOPROP 70

600
TURBOPROP 50

140

740
DELIVERIES

+2.8% +4.3% 440

GDP GROWTH TRAFFIC GROWTH NEW ROUTES

1015
TURBOPROPS IN SERVICE

590
Route creation will accelerate and drive growth,
especially in South East Asia, where air connections will
offer a faster and more efficient choice to travelers.

Many ageing and out of production turboprops are

still operated in mature countries and will have to be
replaced.
2017 2037
46 47
 FORECAST by region Executive Summary
FOCUS ON South asia
CAPACITY

Turboprop 70

Turboprop 50
220
40

260
DELIVERIES

+5.9% +10.9% 200

GDP GROWTH TRAFFIC GROWTH NEW ROUTES
TURBOPROPs in service

360 With some of the fastest growing markets, route creation

is crucial to enhance connectivity and support economic
growth in the region.
120
Turboprops are the perfect tool for this, allowing
affordable and sustainable operations on thin markets
2017 2037 and from challenging airfields.

48 49
 FORECAST by region Executive Summary
FOCUSCAPACITY
ON China

Turboprop 70

Turboprop 50

230
70

300
DELIVERIES

+4.6% +47.1% 690

GDP GROWTH TRAFFIC GROWTH NEW ROUTES
TURBOPROPs in service

Regional market is at an early stage of development with

340 an inefficient use of large capacity aircraft generating the
extensive need for public subsidies.

40 Chinese government encourages the development of

regional connectivity which will result in the creation of
2017 2037 new routes.

50 51
 FORECAST by region
FOCUS ON Central Europe, Russia & CIS
CAPACITY

Turboprop 70

Turboprop 50

190
60

250
DELIVERIES

+2.2% +10% 240

GDP GROWTH TRAFFIC GROWTH NEW ROUTES
TURBOPROPs in service

Stronger growth in emerging economies creates

280 opportunities for increasing air traffic and better regional
connectivity.
100
Ageing current turboprop fleet will pave the way for a
requirement for cost-efficient and high performance
2017 2037 replacement aircraft.

52 53
 FORECAST by region Executive Summary
FOCUS ON WESTERN EUROPE

Turboprop 70

Turboprop 50 300

50

350
DELIVERIES

+1.4% +1.2% 160

GDP GROWTH TRAFFIC GROWTH NEW ROUTES

525
TURBOPROPs in service

Turboprops have the unique capability to access even

450 the most challenging airfields, thus contributing to
valuable point-to-point connectivity in a competitive
market.

Modern turboprops are the most cost-efficient

replacement for the existing fleet as well as for upsizing
2017 2037 the current 30 seat fleet.

54 55
 FREIGHTERS
FREIGHTERS
Executive Summary
Significant untapped opportunities
CAPACITY E-commerce continues to grow
in emerging markets

Worldwide turboprop freighter fleet Population with internet access

distribution 2017

x2
37%
41%

9% 6%
7%

2007
2009
2011
2013
2015
2017
2019
2021
2023
2025
2027
2029
2031
2033
2035
2037
Emerging & Developing

78% Advanced

of the current turboprop

freighter fleet is flying in
Europe and North-America

Developing and emerging countries will see their share

There is still ample room for expansion in emerging
markets (e.g. China, India, Brazil, South-East Asia).
Turboprop freighters could efficiently contribute to
regional economic development in these markets, be it
as feeders in larger integrator networks or as a faster and
more reliable alternative to surface transportation.
of Internet users double over the next 20 years, while also
enjoying the bulk of population growth.
E-commerce will continue to influence consumer habits,
shaping worldwide cargo and logistics networks.
Turboprop freighters have key role to play as a means of
last mile delivery in a timely manner.

58 59
 FREIGHTERS FREIGHTERS
Executive Summary
upsizing capacity
CAPACITY Turboprop freighter demand

Influence of feedstock on fleet capacity In-service turboprop freighter fleet

Opportunities
Today's for freighter Tomorrow’s
fleet conversion fleet
TP 8t
Down-gauge 420 TP 5t
TP 3t to 2t capacity
TP 3t
No
0
feedstock

Up-gauge to
122
5t capacity

TP 5t
Limited
feedstock 87

Up-gauge to
8t capacity
124

TP 8t
Ample 40
feedstock
2017 2037
460
Freighter
deliveries

The air cargo market is highly price sensitive and Growing world trade together with the emergence of
operators constantly seek the best economics. This new markets will result in a 3.2% annual growth over the
explains the clear market preference for turboprops, next 20 years. This growth will translate into an increase in
which represent 96% of the regional freighter fleet. overall fleet size and upsizing of current aircraft gauge.

The evolution of the turboprop freighter fleet will be The 8-tonne segment will become the reference point
determined by feedstock availability and market needs. for the market while 3-5 tonne capacities will significantly
reduce due to a lack of feedstock.

60 61
SAFE HARBOUR STATEMENT
Disclaimer
This presentation includes forward-looking statements. Words
such as anticipates, believes, estimates, expects, intends,
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By their nature, forward-looking statements involve risk
and uncertainty because they relate to future events and
circumstances and there are many factors that could cause
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expressed or implied by these forward-looking statements.

These factors include but are not limited to:

• Changes in general economic, political or market
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development and management risks;
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Any forward-looking statement contained in this presentation/

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ATR undertakes no obligation to publicly revise or update any
forward-looking statements in light of new information.
 ATR

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