Turkish Airlines to Ink $20 Billion Deal with Airbus and Rolls-Royce for Local Aircraft Component Production

Turkish Airlines is nearing a significant agreement with Airbus SE and Rolls-Royce Holdings Plc for the domestic production of aircraft parts, valued at up to $20 billion. This deal is part of a larger aircraft purchase strategy announced last year, which includes the acquisition of 230 aircraft from Airbus, aimed at expanding the airline’s operations through its Istanbul hub.

Officials familiar with the negotiations revealed that a signing ceremony is expected to take place later this month in Istanbul, signaling a major step towards enhancing Turkey’s aviation manufacturing capabilities. The deal not only bolsters Turkish Airlines’ competitive edge against major regional players like Emirates and Qatar Airways but also aligns with Turkey’s broader ambitions to develop its civilian and military aviation sectors.

As part of this strategic initiative, Turkish companies, including the state-run TUSAS Engine Industries Inc. (TEI), are set to participate in the parts manufacturing program. This move underscores a national push to integrate local production into major industrial procurements, reflecting a shift towards greater self-sufficiency in technology and production capabilities.

While Airbus has refrained from commenting on the upcoming agreement, and Rolls-Royce has yet to make a statement, the anticipation surrounding this deal has positively influenced the stock prices of both companies in London’s trading sessions.

This partnership not only promises to enhance Turkey’s engineering prowess in the aviation sector but also strengthens its ongoing collaborations with global aerospace leaders. Rolls-Royce, in particular, has existing ties in Turkey through a joint venture with the Kale Group, and its CEO’s Turkish-British dual citizenship further highlights the deep business connections between Turkey and the United Kingdom in aerospace endeavors.

The deal, pivotal for Turkish Airlines and Turkey’s aviation industry, is part of a broader governmental strategy to include domestic production stipulations in its international procurements, a policy extending to both defense and civilian sectors.

Sources: AirGuide Business airguide.info, bing.com, bloomberg.com