Finmeccanica May Build 90-Seat Turboprop Without EADS Help

Finmeccanica SpA (FNC) would consider building a 90-seat turboprop without its traditional partner European Aeronautic, Defence & Space Co. as it seeks to deepen its involvement in regional planemaking.

“If EADS is not interested in developing the airplane with us we will find alternatives,” Giuseppe Giordo, chief executive officer of Rome-based Finmeccanica’s airplane unit Alenia Aermacchi said today in an interview at the Paris Air Show. Giordo declined say whether Alenia would go it alone or seek a partner.

High fuel costs have spurred airline demand to replace jets with more efficient turboprops helping drive the backlog at ATR, the Finmeccanica joint venture with EADS, to a record $6.5 billion. ATR, whose planes now range in size from 48 to 70 seats, has considered building on that sales success with a larger model and completed initial designs of a 90-seater.

“There is huge market potential for a turboprop bigger than the ATR 72,” Giordo said, referring to the largest model the joint venture sells. “I hope that before the end of this year we will have a decision to launch the 90-seater.”

Strategically Important

Alenia, whose parent Finmeccanica is weighed down by losses and more than 4 billion euros ($5.29 billion) in debt, considers the program strategically important and would seek third-party financing to proceed with development, Giordo said.

“Airbus is, together with its partners, studying the developments in the regional market,” Kiran Rao, executive vice president for strategy and marketing at Airbus, said in e-mail comments. “The most likely outcome will be a new generation of turboprops with increased size, greater comfort and significant improvement in efficiency.”

Filippo Bagnato, chief executive of ATR, as Toulouse, France-based Avions de Transport Regional is known, has said previously he estimates such a plane would cost about $2 billion to develop. The goal is to introduce the plane into service around 2018 or 2019, he said today at the Paris expo.

Giordo said that Alenia is starting to prepare research and production facilities, as well as engineering staff, to work on a the new plan it calls the New Generation Turboprop.

To contact the reporter on this story: Robert Wall in London at rwall6@bloomberg.net

To contact the editor responsible for this story: Benedikt Kammel at bkammel@bloomberg.net

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