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Airbus to lift spending in Turkish aerospace sector

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(Globalpost/GlobalPost)

By Ayla Jean Yackley

ISTANBUL (Reuters) - EADS <EAD.PA> unit Airbus plans to double spending in Turkey from last year's $74 million (48.5 million pounds) "very soon" as it deepens its partnership with the local aerospace industry, its chief executive said.

In a speech to mark the signing of Turkish Airlines' <THYAO.IS> recent order for 117 Airbus passenger planes, Fabrice Bregier also said Airbus planned to lift spending in Turkey by 30-fold in a little more than a decade.

"We expect by 2025 we will reach spending of $2.4 billion ... This will make Airbus the biggest partner for Turkish aerospace," Bregier said.

Bregier told Reuters in an interview the expenditure would mainly come in the form of orders likely to be awarded to state-run Turkish Aerospace Industries (TAI), which produces military and commercial aircraft.

Airbus Military, which is headquartered in Madrid, already produces parts for its A400M airlifter in Turkey, according to the company's website.

Turkish Transport Minister Binali Yildirim said at the ceremony the government wanted Airbus to make planes in Turkey.

"We want an extensive agreement from you on producing planes in Turkey and we have the capacity to give you every support and incentive for that," Yildirim said.

But Bregier said that suggestion was "even more ambitious" and that Airbus would instead play a supporting role to Turkey's existing aerospace industry.

Bregier also said he expected national carrier Turkish Airlines <THYAO.IS> to eventually order Airbus's A380, the world's largest airliner, to meet demand for flights to the United States and other long-haul, populous destinations.

But Turkish Airlines Chief Executive Temel Kotil, in a separate interview, said he did not see a need at present for the A380 because the airline's focus is on increasing the frequency of existing routes with smaller aircraft.

Kotil said he expected to begin taking delivery of the A320 family of aircraft, its biggest-ever order, in 2013.

This month, the state-run carrier also committed to buying 70 narrow-body plans worth $6.9 billion at list prices from Airbus rival Boeing <BA.N> by 2021.

The orders will serve the Istanbul-based carrier's ambitious plans to expand its fleet by about 60 percent to more than 400 aircraft by 2020, when 70 percent of passengers will be on international flights, he said.

By then, it will double daily flights to 2,000 and carry upwards of 400,000 passengers, or nearly 100 million people a year, he said.

Turkey plans to build a third airport for Istanbul, supplementing Ataturk Airport which serves the city's European side and Sabiha Gokcen Airport, situated on its Asian side.

(Additional reporting by Evrim Ergin; Editing by David Holmes)

http://www.globalpost.com/dispatch/news/thomson-reuters/130417/airbus-lift-spending-turkish-aerospace-sector