Budget carrier Pegasus Airlines turned its back on Boeing and placed its first order for 75 A320neo Airbus jetliners on Tuesday in a $7.5 bln deal hailed as Turkey's largest single plane order.
Pegasus operates aircraft built by Airbus's arch-rival Boeing. It switched allegiance after what industry sources described as a bitterly fought price contest between the planemakers, during negotiations first reported by Reuters.
Pegasus Chairman Ali Sabanci said he had initially considered buying 40 aircraft, but increased this to keep up with Turkey's aviation growth .
"This … is the largest (order) in the history of Turkish civil aviation," Sabanci told politicians and VIPs in the Istanbul carrier's training centre.
Shares in Airbus parent EADS rose 2.2%.
The deal includes a firm order for 75 Airbus aircraft, including 58 fuel-saving A320neo aircraft and 17 A321neo jets. Those aircraft have a combined list price of $7.5 billion.
It also includes options for a further 25 aircraft. If all options are exercised, the deal's value for all 100 aircraft could rise to $9.9 billion.
Airbus, which had tried unsuccessfully to break Boeing's monopoly at the Turkish carrier on two previous occasions, conceded it had offered discounts but declined to give details.
"We had a very tough negotiation," said Christopher Buckley, Airbus Executive Vice President Europe, Asia and Pacific.
Airbus and Boeing have both accused each other of starting a price war this year. Actual prices are rarely disclosed but some analysts say aircraft are being offered at below half price.
In Asia, a key Airbus customer, Singapore Airlines regional subsidiary SilkAir, defected to Boeing in August after another gruelling campaign said to have been won on prices.
TURKISH GROWTH
Pegasus Airlines announced a deal value of $12 billion, which is significantly above the current list prices, but said this included a provision for automatic price rises before delivery which will take place between 2015 or 2016 and 2022.
Founded in 1990, Pegasus has grown its fleet from just two aircraft to more than 40 mostly Boeing 737-800s over the past two decades and serves 62 destinations in 26 countries.
Its expansion plans highlight rapid growth in Turkish aviation after flag carrier Turkish Airlines recently ordered long-range aircraft from both Boeing and Airbus.
Turkish Transport Minister Binali Yildirim said the number of passengers handled in Turkish airports was projected to rise from 130 million this year to 350 million by 2023.
He contrasted recent orders from Pegasus and larger rival Turkish Airlines for Airbus jets with faltering attempts by Turkey to enter the European Union.
"Although we have jet-speed relations with Airbus, our relations with EU showed almost no progress", Yildirim said.
Turkey began talks in 2005 but has only completed one of the 35 policy 'chapters' every candidate must conclude to join the trade bloc. All but 13 of those chapters are blocked by France, Cyprus and the European Commission, the EU's executive arm.
In a speech, Yildirim also challenged Airbus to contribute to Turkey's aviation sector from the revenue of Pegasus orders.
Airbus says work in Turkey will support 2,500 jobs by 2015 and its total spending there will reach $2.4 billion by 2025.
Turkey's aerospace industry participates in the Airbus A400M military airlifter, supplies some fuselage panels for A320 jets and will make ailerons or control surfaces on the future A350.
