By Tim Hepher
COPENHAGEN, Sept 15 (Reuters) – Boeing is close to finalising a delayed order for 150 of its 737 MAX jets after Turkish Airlines threatened to walk away from the high-profile deal in a dispute over maintenance with engine maker CFM, four people familiar with the matter said.
The deal, part of a package of 225 jets announced after Turkish President Tayyip Erdogan met U.S. President Donald Trump a year ago, had been held up by disagreement over the airline’s request for an industrial deal on engine maintenance but is back on course and may be signed next week, three of the people said.
Boeing and engine maker CFM, co-owned by GE Aerospace and France’s Safran, declined to comment. Turkish Airlines did not respond to a request for comment.
Squeezed by recent supply chain shortages and rising spares prices, airlines are increasingly negotiating long-term engine deals at the same time as ordering new jets, injecting greater complexity into headline-generating aircraft deals.
Any public confirmation of the order would avoid a potentially embarrassing reversal of last year’s White House announcement, one of many Boeing deals associated with the U.S. president, two of the sources said, asking not to be named.
Turkish media reports said Trump and Erdogan are expected to meet again next week, coinciding with United Nations General Assembly gatherings in New York. There was no immediate comment from the White House on whether the two leaders would meet.
At the heart of the dispute is who should bear the most risk on the cost of long-term repairs, industry sources said.
‘PREMIER’ MAINTENANCE PLANT
Turkish Airlines is one of the world’s largest carriers with a mixed fleet of more than 400 Boeing and Airbus jets.
Weeks after announcing the broader Boeing deal last year, it unexpectedly threatened to ditch the 150 MAX jets included in the order and switch to Airbus, citing a dispute with CFM over prices.
Industry sources later said the airline also wanted to open its own maintenance plant for engines that power the 737 MAX by directly joining the top tier of CFM partners, a move that would grant accelerated access to the latest repair technology.
It was not immediately clear whether the two sides had reached agreement on the so-called “Premier” maintenance plant.
Commenting on the unusual public spat last October, GE Aerospace CEO Larry Culp likened the airline’s threat to cancel the deal to negotiating “new deals in public” and insisted GE’s pricing strategy reflected the value provided to customers.
On Monday, a senior Turkish Airlines executive told an industry conference that the carrier continued to weigh more aircraft orders to feed the rapid expansion of its Istanbul hub.
The airline is studying regional jets such as the Embraer E2 or Airbus A220 while also comparing the much-larger Boeing 777X and Airbus A350-1000, Senior Vice President Finance Okan Bas told the International Society of Transport Aircraft Trading (ISTAT) meeting.
He declined to comment on the pending Boeing MAX order.
(Additional reportying by Humeyra Pamuk, Rajesh Kumar Singh; Editing by Barbara Lewis and Alexander Smith)
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