Turkish Airlines' $20 Billion Deal with Rolls-Royce and Airbus

Turkish Airlines is on the verge of finalizing a deal with Rolls-Royce and Airbus for the domestic manufacturing of aircraft components worth up to $20 billion. This move stems from Turkey's recent purchase of 230 aircraft from Airbus, coupled with their plans for further expansion of the Istanbul hub. The agreement aligns with Turkey's strategic objective to bolster its civilian and military aviation industry, reflecting a significant milestone in their $70 billion order with Airbus aimed at accomplishing this by 2023.

Key Takeaways

• Turkish Airlines plans to sign a deal with Rolls-Royce and Airbus for domestic production of aircraft components worth $20B.
• The purchase of 230 aircraft from Airbus in December includes options for more, supporting Turkey's ambition to boost its Istanbul hub.
• The agreement for local production of airplane parts aligns with Turkey's strategy to develop its aviation industry.
• The domestic production deal is a significant step towards Turkey's goal of growing its civilian and military aviation sectors.
• Turkey's 2023 Airbus order, valued at approximately $70B, includes the milestone of domestic production for airplane parts.

Analysis

Turkey's collaboration with Rolls-Royce and Airbus to domestically manufacture aircraft components worth $20 billion is likely to have wide-ranging impacts. This move not only furthers Turkey's strategic objective of strengthening its aviation industry but also signals a significant milestone in its $70 billion order with Airbus. The direct beneficiaries are Turkish Airlines, Rolls-Royce, and Airbus, while the broader Turkish aviation industry stands to gain from enhanced technological capabilities. In the long term, this initiative could boost Turkey's economic position and solidify its status as a key player in the global aviation market. However, potential challenges relating to technological expertise and supply chain management may also arise.

Did You Know?

• Istanbul hub expansion: Turkey's plans for further expansion of the Istanbul hub refers to the ongoing development and growth of Istanbul's main airport as a significant transportation hub for the region.

• Domestic production of aircraft components: The agreement for local production of airplane parts signifies Turkey's strategic objective to bolster its civilian and military aviation industry by having these components manufactured within the country.

• 2023 Airbus order: Turkey's $70 billion order with Airbus refers to the significant investment the country is making in acquiring aircraft from Airbus, part of its broader plan to enhance its aviation industry by the year 2023.