INTERVIEW-Turkish Airlines to order over 100 narrow-body planes

Thu Jan 24, 2013 12:18pm GMT

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* Airbus, Boeing eye world's fastest-growing major carrier

* Possible bond issue to fund expansion

* No board decision yet on closer Lufthansa ties

By Evrim Ergin and Nick Tattersall

ISTANBUL, Jan 24 (Reuters) - Turkish Airlines, the world's fastest-growing carrier, plans to order more than 100 narrow-body planes by the end of March, underlining its position as a key client for global planemakers after buying billions of dollars worth of larger models in 2012.

Chairman Hamdi Topcu told Reuters the airline would finalise five new Airbus A330-300 orders this week on top of the 35 wide-body aircraft ordered from rivals Airbus and Boeing last year, then focus on expanding its fleet of smaller planes.

"I cannot give an exact number for the narrow-body plane orders, but it will very likely be over 100. We aim to finalise this order by the end of March," Topcu said in an interview in his office in Istanbul.

Industry sources had said Turkey's flag carrier was expected to seek a large number of narrow-body jets, such as the 150-seat Airbus A320, this year after ordering larger models in 2012.

French Trade Minister Nicole Bricq used an official visit to Turkey this month to press Airbus' case for the business.

"We ordered 20 Boeing 777-300 and 15 Airbus A330-300 (last year). We want them as soon as possible and are in talks to add five more (A330s) to this order. We aim to finalise it this week," Topcu said.

Turkish Airlines finalised an order worth $4.7 billion at list prices for 15 Boeing 777-300ER aircraft last month, the biggest order by value in the airline's history, and which the U.S. planemaker said at the time included options for a further five of the 365-seat aircraft.

Turkish Airlines also announced in October that it would buy 15 Airbus A330-300 planes between 2014-2016.

After launching 33 new destinations in 2012, the carrier hopes to open as many as 40 new routes in 2013, around a quarter of them to Africa, and will be flying to every country in Europe by the end of the year, Topcu said.

POSSIBLE BOND ISSUE

The carrier, which aims to have 219 aircraft in its fleet by the end of the year from a current 202, plans to lease seven planes until the delivery of the ordered aircraft, Topcu said.

"In our fleet projection we will have over 350 planes in 2023, and this number could be even 380," Topcu said.

The company, 49 percent owned by the government with the remainder floated on the Istanbul stock exchange, is considering issuing a bond to finance its expansion, he said.

But he said a secondary public offering for the airline was not currently on the government's agenda.

Topcu said Turkish Airlines was open to closer ties with Lufthansa, but that there were currently no firm plans.

"We are ready for any such cooperations ... but there is no board decision taken," he said. "If the model to be formed is going to be beneficial for both companies, we are open to any kind of talks."

Turkish Airlines and Lufthansa have been working together for some time, bolstered by Germany's large Turkish population, the pair's membership of the Star Alliance marketing venture and a 50-50 joint venture in charter carrier SunExpress.

Speculation about plans for closer ties between the two airlines was triggered in November when Turkish Prime Minister Tayyip Erdogan said he had discussed the issue with German Chancellor Angela Merkel.

Analysts have said any new cooperation could involve a deeper code share agreement, a new joint venture on routes where cost savings could be achieved, or in the longer term a potential equity swap.

"Before any cooperation with Lufthansa we have to investigate the Turkish, German and EU legal and regulatory framework. This is going to be one of the most important aspects," Topcu said. (Editing by Sophie walker)

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