Turkish Airlines (THY) said on Tuesday it plans to order up to 105 planes from manufacturers Boeing Co and Airbus, as one of Europe's fastest growing carriers seeks to strengthen its position in the region.
THY, partly owned by the Turkish state, said in a statement that it had invited the European and U.S. companies to bid for the tender of 105 aircraft, including options for 30.
THY said its order would be for 25 double-aisle long-haul and 50 single-aisle short- and medium-haul planes.
The airline would also place options to purchase 10 double-aisle long-haul and 20 single-aisle aircraft.
THY's fleet expansion comes as the industry struggles with high energy prices, a global financial crisis and consumers increasingly nervous about their purchasing power.
"The THY administration attached utmost importance to the timing of this tender. THY is entering the global crisis and the approaching recession in a strong position both commercially and financially," the company said in a statement.
Major airlines have already begun rapidly downsizing to offset their soaring fuel bills. Capacity cuts throughout the industry are also likely to cut airline costs and result in higher fares.
The Istanbul-based carrier, along with its Middle East-based peers, sees the current turmoil as an opportunity to expand globally as rival airlines in other regions, particularly the United States and Europe, suffer.
In August THY said it expected to beat a 2008 sales target of $4.5 billion. First-half sales rose 23 percent to 2.61 billion lira, while net profit rose to 255.14 million lira in the January-June period versus 89.27 million the previous year.
GROWTH REGION
"The Turkish economy is growing fast and we expect that market to grow briskly in the next 20 years, at about 2 to 2.5 times the average for Europe," Randy Tinseth, Boeing Commercial Airplanes Vice President or Marketing, said.
"There is both strong tourism and good business traffic, and the Turkish market is expanding for good fundamental reasons," he added at an aerospace market briefing in Paris.
Despite short-term pressure on air travel from a weak economy and high oil prices, Boeing sees average annual traffic growth in Europe of 4.1 percent between 2008 and 2027, including 3.5 percent for flights contained within the region.
The emergence of new growth markets on the outskirts of Europe is increasing the average distance of flights in the region and bolstering demand for larger aircraft, Tinseth said.
Turkish Airlines said the models in question for the tender were EADS unit Airbus' A350, A330 and A319/320/321, and from Boeing, the 787 Dreamliner, 777 and 737/738/739.
Delivery was expected to start in the second half of 2010.
The tender is part of an ambitious, already announced 2009-2023 programme by THY to sharply expand its fleet and the number of destinations it flies to. It currently has 115 aircraft.
It is also seeking to expand through acquisitions. THY submitted the higher bid for the Bosnian Muslim-Coat federation flag carrier BH Airlines, a government source said last week.
THY — a new member of global Star Alliance — failed to qualify in a tender for a controlling stake in Austrian Airlines after it missed a deadline.
Shares in THY traded 3.43 percent higher at 5.12 lira, underperforming the Istanbul main share index trading 5.3 percent higher at 0830 GMT.
