Turkish Airlines, the flag carrier of Turkey, is in advanced discussions with Boeing to acquire a massive fleet of 225 jets. This potential deal, however, faces a significant hurdle: reaching an agreement on engine pricing. The order centers on two Boeing models: 150 of the 737 MAX narrow-body aircraft and 75 of the wide-body 787 planes.
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While both parties seem enthusiastic about the deal, the critical factor is the cost of the engines for the 737 MAX. Unlike Airbus, which offers a choice of engine manufacturers for its A320neo, the MAX has only one engine option - the CFM LEAP engine produced by CFM International, a joint venture between GE and Safran. This lack of competition gives CFM significant leverage in price negotiations.
Turkish Airlines Chairman Ahmet Bolat expressed his confidence in Boeing overcoming its recent challenges and highlighted the importance of a diversified fleet for the airline. However, Bolat emphasized that securing a favorable price on the CFM engines is essential for finalizing the agreement. The airline has already submitted a counteroffer to CFM and is awaiting their response. Bolat's stance is likely influenced by past experiences. Turkish Airlines has faced grounding issues with some of its Airbus narrow-body jets due to Pratt & Whitney engine problems. While Bolat believes these issues will be resolved within two years, the episode underscores the airline's desire for a more cost-effective and potentially less troublesome engine option for the MAX.
The Boeing-Turkish Airlines negotiations come amidst a broader context. Just recently, Turkish Airlines placed a significant order with Airbus for 355 jets. This dual-pronged approach suggests Bolat's desire to establish a strong partnership with both major aircraft manufacturers, potentially using competition to leverage better deals. Whether Boeing and CFM can meet Turkish Airlines' price expectations remains to be seen. If an agreement is reached, it would be a significant win for Boeing, bolstering its order book and showcasing confidence in the 737 MAX's post-grounding recovery. For Turkish Airlines, the deal hinges on acquiring a modern, fuel-efficient fleet at a competitive price. The coming weeks will be crucial as both sides navigate the complexities of engine pricing and finalize a potential landmark agreement.