ATR challenges Pratt's hold on turboprop engine market

Christian Scherer, who took over as chief executive of the world's largest maker of civil turboprops last year, told Reuters on Wednesday he would open the door to other potential suppliers as soon as he could.

Pratt, which is struggling to reassert itself in the passenger jet market, enjoys an effective monopoly in the market for smaller regional turboprops via its Canadian subsidiary.

ATR and Canada's Bombardier dominate the market of about 100 aircraft a year and both exclusively use PW&C engines.

The most obvious beneficiary from any decision by ATR to switch engine suppliers would be General Electric which is developing an "Advanced Turboprop", so far aimed at the business and general aviation markets.

Planemakers and airlines typically prefer competition in the engine market in order to drive down the prices for engines and the all-important aftermarket services.

Although China is vying to enter the turboprop market with its Xian MA700 aircraft, even this is being developed with engines from PW&C, underlining the U.S. firm's strong position.

Scherer praised Pratt & Whitney Canada professionalism, but said he was concerned about its "monopolistic" position, adding he would seek to stimulate competition "at the next available opportunity".

"I don't say we won't continue with Pratt, but I will use the next opening I can to weaken the over-powerful position of a number of our suppliers," Scherer said.

Pratt & Whitney Canada was not immediately available for comment.

Industry sources said Scherer has reviewed suppliers and recently replaced Honeywell as supplier of an air conditioning system in favor of Toulouse-based Liebherr Aerospace.

Any change in engine supplier would not take place immediately.

Franco-Italian ATR is pondering whether to update its family of two aircraft types with new engines and other improvements or go further and invest in an entirely new design.

But no decision is imminent as its shareholders - Airbus and Leonardo - can't agree on whether to put up the roughly $3 billion needed to develop a new turboprop.

(Reporting by Tim Hepher, Cyril Altmeyer; editing by Alexander Smith)