Turkish Airlines orders the purchase of more than 200 Airbus aircraft

 Turkish Airlines seeks to dominate the aviation and travel market during the next decade, especially over long distances, while strengthening its fleet with dozens of aircraft as part of a huge deal with Airbus that officials and experts consider to be the largest in the company’s history.

Turkish Airlines orders the purchase of more than 200 Airbus aircraft

• Istanbul - Turkish Airlines' deal with European aircraft manufacturer Airbus marked a major turning point in the growing global travel market and will serve as a strong boost for Istanbul to become an international aviation hub within years.

• Last weekend, the company officially ordered more than 200 Airbus aircraft as part of an agreement worth billions of dollars to support the huge tourism industry that Ankara relies on to generate revenues and enhance its hard currency cash reserves.

• Its CEO, Bilal Akshi, explained after the announcement that the total number of new aircraft may reach 355, which will make the deal one of the largest in the history of the aviation industry, but the numbers differed between Turkish Airlines and Airbus.

• Turkish Airlines said in a statement last Friday that it had “placed orders for 220 aircraft, including 70 A350 long-haul wide-body aircraft and 150 A321neo single-aisle aircraft.”

• It also obtained the rights to purchase 135 additional Airbus aircraft, including the purchase of 20 long-range A350-900 aircraft, as well as 15 of the larger A350-1000 aircraft.

• Airbus reported that the number of new aircraft is only 220 and that the other ten aircraft were previously ordered by the Turkish company last September. She indicated that the new order includes 150 A321neo aircraft and 60 A350-900 aircraft.

• The book value of the ordered aircraft is about $40 billion. However, the final price of aircraft is often lower than its value because manufacturers offer discounts for large orders.

• The agreement, which has been under discussion for weeks, underscores the strong recovery in international air travel. Demand for the industry's largest aircraft has increased after a prolonged recession during the Corona pandemic, which severely affected long-distance travel.

• The backlog of orders for both Airbus and its American competitor Boeing has reached record levels, with airlines around the world rushing to place purchase orders this year and securing increasingly scarce delivery periods.

• The deal represents another boost for Britain's Rolls-Royce, whose Trent XWB engines power the A350 aircraft used on long-haul flights.

• This order will also make Turkish Airlines the largest operator of A350 aircraft using Trent XWB engines in the world.

• The CEO of the British company, Tuvan Erginbilgic, said that the agreement is “evidence that the measures we are taking to transform Rolls-Royce into a competitive, high-performance company supported by profitable growth are paying off.”

• Industry experts believe that Turkish Airlines is working to be the main competitor to regional airlines such as Emirates Airlines, which currently has an active fleet of more than 250 aircraft and plans to strengthen it with dozens of aircraft in the next few years.

• They explained that for Emirates Airlines to receive passengers from London, for example, it must send a long-distance plane to transport them to Dubai and then to other, more distant destinations, especially Africa and Central Asia.

• In return, Turkish Airlines can send an Airbus 320 or 321, and bring them to Istanbul to receive a larger plane that will fly them over long distances.

• They pointed out that the Turkish company will compete strongly with fleet support in the markets of the Far East and Australia, and thus have a greater share of global travel traffic.

• Officials have plans to add 54 new routes, including 22 to Europe, 13 to the Far East and Asia, and nine to the Americas. The group is also expanding the international reach of its low-cost carrier Anatolia Jet.

• Turkish Airlines, 49 percent owned by the Turkish Wealth Fund, is among the country's crown jewels and seeks to grow significantly over the next decade.

• President Recep Tayyip Erdogan, who was re-elected last May, has supported the presence of a major domestic airline to help put Turkey and its $900 billion economy on the global map.

• These purchases come at a time when the government seeks to attract foreign currency inflows to narrow the massive current account deficit.

• The company’s Chairman of the Board of Directors, Ahmed Polat, said: “We are strengthening our leading position in global aviation, and contributing to the country becoming a leading aviation hub.”

• “This investment is a decisive milestone in the further development of the aviation industry in Turkey,” he stressed, adding that it will contribute to “the country’s emergence as an aviation hub” and “will have a significant positive impact on tourism” in the country.

• Tourism is an important source of hard currency, as Turkey achieved about $42 billion in tourism revenues in the first nine months of this year, according to official statistics.

• The company's flights go to most countries in the world, and it uses its center in Istanbul as the main airport for changing flights. It has announced for months its desire to place a large order, as it aims to nearly double the size of its fleet over the next decade.

• Turkish Airlines currently operates flights to more than 120 global destinations from the new international airport in Istanbul, which was opened in 2018.

• Ankara is keen to transform Istanbul's sprawling, $11 billion airport, one of President Erdogan's signature projects and the main base of Turkish Airlines, into a major aviation hub.

• The airport is already ranked among the busiest airports in the world, with more than 64.3 million passengers traveling through it last year, surpassing Heathrow Airport in London, according to data from the Airports Council International.

• The company achieved net profits of $2.8 billion in the first nine months of 2023, an increase of about a quarter over the same period last year.

Conclusion: The deal also comes at a time when the Turkish government is seeking to attract cash flows in hard currency to reduce the current account deficit.

The deal also enhances tourism, on which Turkey depends, as the sector’s revenues in the first 9 months of this year reached levels of $42 billion, according to official data.

The airline is owned by Turkey's sovereign fund, and the company is currently seeking to grow further over the next decade, with plans to add 54 new routes, including 22 to Europe, and 9 routes to the Americas.