Airbus to buy $7B worth of goods from Turkish suppliers until 2030

Published 25.01.2018 17:24 Modified 26.01.2018 09:24
Turkish Undersecretariat for Defense Industry İsmail Demir (R) and Airbus Chief Human Resources Officer Thierry Baril sign MoU on Jan. 25, 2018. (AA Photo)
Turkish Undersecretariat for Defense Industry İsmail Demir (R) and Airbus Chief Human Resources Officer Thierry Baril sign MoU on Jan. 25, 2018. (AA Photo)

Airbus and the Undersecretariat for Defense Industries inked a deal Thursday in Istanbul to further improve industrial cooperation. Airbus is planning to purchase components worth $2 billion until 2020 from Turkish suppliers, while it will carry out purchases worth $5 billion between 2020 and 2030

European giant Airbus signed a memorandum of understanding with the Turkish Undersecreteriat for Defense Industries (SSM) Thursday to further expand industrial cooperation in Turkey.

With the agreement, which was signed by SSM head İsmail Demir and Airbus board member Thierry Baril in Istanbul, the two sides agreed to expand industrial partnership in Turkey and to increase cooperation.

Airbus will continue to develop its purchases from Turkey and will purchase components worth over $2 billion by 2020 from Turkish suppliers. According to the agreement, it aims to carry out purchases worth more than $5 billion between 2020 and 2030.

Speaking of the strategic business cooperation with Airbus at the "Strategic Partnership in Turkey" ceremony, organized by SSM and Airbus, Demir said they set a $5 billion target. Indicating that although it is a very difficult target, he said he was sure that when the time comes it will exceed $5 billion and that the European giant will fondly invest even more in Turkish industry's production, engineering and services.

"This is our commitment to Airbus," said Demir.

Underscoring that Turkey attaches great importance to the development of technology, he said technology and aviation were the driving forces of this field. Airbus is one of the leading companies in aviation, Demir continued.

"We will talk about business opportunities together. The SSM and Airbus have worked together on many successful programs until now and we had many business collaborations with Airbus. It will continue like this in the future," he said.

Emphasizing that they were speaking of the future partnership program, Demir stressed the importance of such an agreement.

"Both civilian and military aviation will be included. Airbus products are being used for air transport, helicopters and satellites in Turkey. These are the products Turkey and Airbus jointly work on at the moment," he added.

He also emphasized that he was also happy to be a part of national flag carrier Turkish Airlines (THY), which signed a nonbinding agreement with Airbus on a potential order for 25 twin-engine A350-900 aircraft during an official visit by President Recep Tayyip Erdoğan to Paris earlier this month.

Referring to the agreement, President Erdoğan said he hopes it would be lucrative for both sides, while French President Macron suggested that THY's agreement would further enhance aviation cooperation.

During the ceremony Thursday, Airbus's Baril said the aircraft was one of their best and most reliable and it will enable the THY to open new long-range routes.

Airbus has 900 and 1000 model A350 aircrafts that use Rolls-Royce Trent XWB engines. The only difference between the two planes is capacity, as the 900 series can carry 300 passengers while the 1000 series can carry 340.

The A350's 900 and 1000 models received 858 orders from 45 airlines and leasing companies with 133 of them delivered to 17 airlines. The aircraft flew around 490,000 hours to more than 150 points. They have also carried around 19 million passengers to date.

During the ceremony, Demir said that perhaps it can never be perceived as separate, but Airbus should see the cooperation with the SSM differently.

He also underscored that the SSM was not only playing a role in the defense industry, but was also working for small and medium-sized enterprises (SMEs) and the industry in the broad sense.

"You will be able to work together with companies that you will be proud of in the future. This is a guarantee we give you. Airbus will also help us in a serious way in this effort," Demir stressed.

The agreement will be a win-win opportunity for both sides, said the SSM head, adding that he himself would like to see it as business cooperation and as a partnership.

Demir underlined that the agreement would contribute to the development of the Turkish industry, not only in civil aviation in the aviation field, but will provide a development for combat aircraft, transport vehicles, helicopters and even space vehicles.

The SSM and Turkish Aerospace Industries (TAI) will closely monitor and follow the project, he added.

Moreover, one of the most crucial facts is that every Airbus aircraft type of both commercial and defense flying today has parts made by Turkish suppliers.

There was a 13-fold increase in Airbus investments in Turkey over the past 10 years. The company is eager to double the 10 year volume in the next decade. It has also secured more than 2,500 jobs in Turkey. The company also expects that over the next 20 years passenger numbers flying to Turkey and on domestic route will triple.

On the other hand, Baril emphasized that the industrial cooperation between Airbus and Turkey and the continuity of this cooperation was one of the most beautiful examples of a successful partnership.

Underscoring that Airbus has more than 130,000 employees from 136 different countries, Baril said diversity was very important for the company, and that they have built their achievements over these differences over the past few years.

Indicating that their companies have grown even further in the last 50 years, he said people's skills and qualities have become more prominent.

Baril suggested that Airbus's turnover in Turkey was approximately $24 million in 2004, stressing that the said figure grew 11-fold to $280 million in 2017.

"Turkey's gross domestic product [GDP] growth is close to 7 percent. The Turkish aviation sector has exceeded this GDP growth in the last 10 years. As Airbus, we are very pleased to be part of the growing sector," Baril added.

Meanwhile, Turkey has been an important part of the Airbus supply chain for nearly 20 years and has partnership in all Airbus aircraft programs, including the prestigious A350 XWB.

While Airbus is focusing on establishing long-term and continuous partnerships with Turkey, the Turkish aviation industry, especially in the last 10 years, has displayed great development in its ability and capacity.

Airbus is a global leader in aviation, aerospace and related services. In 2016, the company generated revenue of 67 billion euros. Airbus offers the widest range of products with seating capacities from 100 to 600 and above.

Airbus is Europe's number one space venture, which also offers tankers, combat, transport and mission aircraft, while it is the world's second-largest space company. In the helicopter industry, it offers the most efficient civilian and military helicopter solutions around the world.

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