According to a Bloomberg News story on Wednesday, Turkey’s national airline Turkish Airlines (THY) is scheduled to execute a $20 billion deal with Airbus and Rolls-Royce Holdings for the domestic manufacture of airplane components.
As part of its large plane acquisition announced last year, Turkish Airlines is going to execute an agreement with Rolls-Royce Holdings Plc and Airbus SE for the local production of aircraft components valued at as much as $20 billion.
Turkish officials with knowledge of the situation claim that a deal may be revealed at a ceremony later this month in Istanbul. Turkish Airlines’ biggest shareholder is Türkiye Wealth Fund (TWF).
The airline had previously stated in public that it intended to nearly increase its fleet to more than 800 aircraft by 2033. In December, the airline disclosed that it had purchased 220 aircraft from Airbus, with options for more as it prepares to expand its Istanbul hub. According to the persons, Türkiye pushed for local manufacture of aeroplane parts as part of the deal.
The agreement, which is a part of the 2023 Airbus contract valued at roughly $70 billion, pertains to the local production of aeroplane parts and is a crucial step toward the nation’s objective of developing its commercial and military aviation industry, according to Bloomberg.
The firm said last December that it will purchase 150 narrow-body A321 Neo aircraft, in addition to 50 wide-body A350-900 jets, 15 A350-1000 planes, and five A350F cargo aircraft, in a statement to the Public Disclosure Platform (KAP). The CEO of Turkish Airlines, Bilal Ekşi, stated on social media that the total purchase might amount to 355 aircraft.
Simultaneously, it was stated that Rolls-Royce would supply the engines for the seventy widebody aircraft that were ordered as part of the agreement.
The production program is likely to involve Turkish enterprises, such as the state-run TUSAŞ Engine Industries Inc. (TEI), according to officials who requested anonymity due to the secret nature of the discussions.
Without providing further details, a Turkish Airlines representative is reported to have confirmed the signing ceremony date. A representative for Airbus declined to comment. For comment, Rolls-Royce could not be reached right away.
Following the news, shares of Rolls-Royce and Airbus increased by 2.8% and 1.6%, respectively, and were trading 2.1% and 1.2% higher at 12:53 p.m. in London.
For a considerable amount of time, Turkey has been in negotiations with international corporations, such as Rolls-Royce, to get engine technology for its in-house tank and warplane projects. The jet engine manufacturer, whose CEO is dual-nationality Turkish and British, already has a joint venture in Turkey with the Kale Group, an industrial giant.
In a March interview with Anadolu Agency (AA), Simon Ward, the president of Airbus Türkiye, praised the aviation giant’s and Türkiye’s long-standing partnership. He added that the 220 aircraft order from THY “was one of the largest orders we received globally, and it had a very positive impact on our order book in 2023.”
The Ankara government has been pushing for the inclusion of home production in its imports of defence and passenger aircraft. Simultaneously, it has made substantial investments in aviation-related projects, including the construction of the massive new Istanbul Airport, which opened in 2018, and the extension of Sabiha Gökçen International Airport, whose second runway started operating last year.
With an average of 1,375 flights per day last year, Istanbul Airport—the major hub for Turkish Airlines—kept its ranking as the busiest airport in Europe, according to a report by the European Organization for the Safety of Air Navigation (Eurocontrol).
