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What's ATR doing?

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  • tenthije
    Harrie Spotter
    • Jan 2000
    • 5102

    What's ATR doing?

    Translated from Dutch:

    http://www.luchtvaartnieuws.nl/news/?ID=12085
    PARIS - The French-Italian builder of turboprop commuter planes has received 90 new orders in 2005. That is a sizeable increase compared to 2004 when only 12 planes where ordered. Therefor ATR wins last years order battle with Bombardier. Bombardier only sold 61 planes of its Q-series. Turnover of ATR increased 15% to 542 million dollar.

    "This commercial succes is proof of the strong revival of turboprops in the regional aviation market", concludes ATR CEO Filippo Bagnato. It is over 15 years ago that ATR had comparable sales. Moreover, the 11 airlines have another 26 planes on option.

    The turboprop comeback is mostly due to the ever rising fuel prices. The growing regional market, and the necessity for airlines to save money. Regional jets tend to be a lot more expensive in use than turboprops of comparable size.

    Airlines that ordered new ATRs in 2005 include Air Deccan (30 ATR72) and Kingfisher (20 ATR 72). Pakistan International ordered 7 ATR42s to replace its current fleet of Fokker F27s. Finncomm Airlines took 8 ATR72s for domestic routes. An odd order came from the Turkish navy for 10 ATR72s.
    Is it me or is there something fishy in this article? Sales of new planes have increased more then 400%, yet turnover increased only 15%? I realise that most turnover for any technical company tends to come from maintenance and spare parts, but the difference here is just enourmous!

    Has ATR been selling at insane prices just to get the big Air Deccan and Kingfisher orders?
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  • Mark L
    Rank 5 Registered User
    • Mar 2003
    • 4325

    #2
    Probably because no money has actually been paid for the ordered aircraft yet, only nearer their delivery schedule?
    My recent and upcoming flights

    Comment

    • GZYL
      Senior Member
      • Jan 2000
      • 1194

      #3
      Are they selling the aircraft at knock-down prices?

      Comment

      • KabirT
        Rank 5 Registered User
        • Jan 2000
        • 8157

        #4
        Seeing there sales book i wouldnt think they would be able to afford to knock down much.
        "one is the loneliest number.."

        Comment

        • LeftcoastCanada
          Junior Member
          • Sep 2005
          • 11

          #5
          Its just the timing - the orders will generally come with a deposit but that is not recognisable as revenue in standard accounting practice. The revenue comes when you deliver the plane (or the customer cancels and bails on his deposit). There may be some accounting rules that allow partial revenue recognition as the plane is being built but I'm not sure about that. So while ATR took deposits on 90 planes it'll only show on their balance sheet as an increase in cash and increase in deferred revenue.

          Also remember that the turnover from the orders may be spread out over multiple years if the customers order for delivery in say 2006, 2007, 2008 so while one might expect revenue in the current fiscal year to increase it may not jump all the way up in the same magnitudeas it'll be spread over the time.

          Comment

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