Turkish Airlines near order for 100 Narrow-Body jets to Boost Network

Turkish Airlines (THYAO) said it’s close to ordering 100 planes to provide short-haul links from Istanbul while scrapping plans to buy the biggest jumbo jets in favor of more modestly sized wide-body planes.

A single-aisle deal may be sealed this year or early next, Chief Executive Officer Temel Kotil said in an interview, adding that “all possibilities” are being considered. Airbus SAS (EAD) and Boeing Co. (BA) offer the A320 and 737, to be upgraded from 2015 and 2017, while Bombardier Inc. (BBD/B) is developing the CSeries model.

Turkish Airlines aims to expand its fleet to 350 planes by 2020 from 201 as Europe’s fifth-biggest carrier builds Istanbul into a hub for inter-continental flights. The company has backed off from an order for the Airbus A380 superjumbo or Boeing 747-8 after deciding more regular flights with the suppliers’ 777 and A330 wide-bodies are a better strategic fit, Kotil said today.

“Our biggest problem is the capacity and the frequency,” the CEO said. “We want to go to higher frequencies. The 777 is big enough.” Possible plans include switching daily services to cities including Chicago and Hong Kong to double-daily, he said.

The company’s chairman, Hamdi Topcu, said in an interview on June 21 that it was poised to order at least 15 A380s or 747s with a list price of $4 billion for delivery from 2014. Topcu said on Sept. 6 that a six-jet purchase remained possible.

Top Performer

Turkish Airlines, as Turk Hava Yollari AO is known, traded down 0.8 percent at 5 liras as of 2:16 p.m. in Istanbul. It has gained by 136 percent this year -- the biggest jump on the 31-member Bloomberg World Airlines Index (BWAIRL) behind U.S. Airways Group Inc. -- after nine-month passenger numbers rose 20 percent even as a sluggish global economy sapped industrywide growth.

The state-backed carrier remains in talks about deepening cooperation with Deutsche Lufthansa AG (LHA), Kotil said in Hong Kong, while declining to provide detail on what is being considered.

“It’s at an early stage and if I keep on talking about it it’s not helping on the agreement side,” he said. “Cooperation could be all aspects. The two companies know each other at the high-level and mid-level management.”

Turkish Air and Lufthansa, already partners in the Star Alliance and their SunExpress holiday-airline joint venture, are examining possibilities short of equity investments, Turkish Finance Minister Mehmet Simsek said this month.

Turkish Air expects to have about 80 long-haul aircraft by 2020, with the rest of the fleet being single-aisle, Kotil said. Some 15 777-300ERs were ordered last month, plus five options, which will “most likely” be exercised, according to the executive, together with 15 Airbus A330-300s.

The carrier, which flies to more countries than any other, will receive 36 new narrow-bodies in the next two years and has orders for further 737s and A320s beyond that, though not yet for the re-engined Max and neo versions.

http://www.bloomberg.com/news/2012-11-28/turkish-air-near-order-for-100-narrow-body-jets-to-boost-network.html