Turkiye Aerospace Industry

The Turkish aerospace market is heavily import-reliant, particularly for air platforms and related equipment. U.S. companies have the largest share of this market (followed by their European and Japanese competitors), providing a wide range of aircraft, helicopters, and other air platforms, as well as subassemblies, aircraft parts/components.

Turkiye’s goal is to improve its manufacturing capabilities and develop a self-sufficient national defense industry. To attain this, Turkiye is trying to maximize local manufacturing capabilities through R&D and technology transfer. Large-scale system integrators along with SMEs, which develop subsystems for system integrators, play a key role in building up indigenous solutions for the defense industry. According to official figures, the share of off-the-shelf direct imports has fallen to 12% from 98% since the 1990s and the share of local production in Turkish Armed Forces (TuAF) procurements had gone up to 68% from 25% since 2003.

Turkiye’s defense industry has gone through a rapid change in less than a decade as Turkiye has become more involved in co-production and co-development projects, which have also brought along export opportunities. With rapid growth over the last 10 years, the industry has reached the point of transition from prototypes to serial production. According to the Defense and Aviation Industry Exporters’ Association, Turkiye’s defense exports reached $3 billion in 2019. According to the Stockholm International Peace Research Institute (SIPRI), Turkiye’s 2019 military expenditures were $20.4 billion , placing it among the top 16 spender countries globally.

In the 1970s there was no aerospace industry in Turkiye whatsoever, and the level of operational activity was low even though the potential for the exploitation of aviation was high. The only military aircraft were those provided by or purchased from the US Government The government of Turkiye hoped to establish an aircraft factory in conjunction with a foreign contractor and was aware of the need for aerospace engineering education.

The absence of any industry and the low activity level should not be construed as a lack of interest in aviation on the part of the Turkish people and government. On three occasions, Turkiye had started an aircraft industry only to see her efforts fail. The first venture was in 1923, building a twin-engine light bomber-transport of the scale of a large twin-Beech in a factory outside of Ankara. Sales were disappointing and the factory was closed. An attempt in the early 1930's for a joint enterprise with the Germans foundered because of conflicting objectives. After World War II a factory was built at Kayseri producing a single-engine airplane whose performance was out-date and un-acceptable to the Turkish Air Force any other potential custonmer. Production was shut down in 1947 and the facility converted to a maintenance and overhaul activity, functions it had been performing since.

In 1988 rocket and missile production was shifted from Makina ve Kimya Endüstrisi Kurumu (MKEK) to a new company, Roket Sanayii (ROKETSAN). ROKETSAN has the largest share in the production of the propulsion system and rocket assembly for the four-country European consortium manufacturing the Stinger SAM. The company also plans to produce multi-launch rocket systems (MLRS) in partnership with a United States firm, the LTV Corporation. A consortium formed by a United States firm, FMC Corporation, and a Turkish firm, Nurol, is projected to produce 1,700 APCs and armored fighting vehicles by 1997.

Peace Onyx is Turkiye's first and largest co-production program. Started in 1984 and marked the development of a significant industrial infrastructure. Under the Peace Onyx I program TÜSAS (Türk Uçak Sanayi Sirketi) Aerospace Industries [TAI] co-produced 152 of 160 Lockheed Martin F-16s that were delivered to the air force between 1987 and 1995. Peace Onyx II began in mid-1996 with 80 F-16s ordered already delivered. Production of the 240 F-16s ended in 2002. 80 of the planes were financed by a $2.5 billion fund set up by the U.S., Saudi Arabia, and Kuwait in return for Turkiye's cooperation in the Gulf War. Lockheed Martin owns 49% of TAI. On 12 December 2006, the Defence Industry Executive Committee decided on the procurement of 30 F-16 Advanced Block 50 aircraft from the U.S. Government through Foreign Military Sales (FMS) under the Peace Onyx IV (PO-IV) Program.

In addition to its coproduction role in the F-16 project, TÜSAS has contracted with Agusta, the Italian aircraft manufacturer, to produce forty SF-260 trainers at the Mürted plant. A contract with Construcciones Aeronáuticas, S.A. (CASA) of Spain calls for joint production of fifty-two CN-235 light transport aircraft. A US$1.1 billion agreement was concluded in 1992 with Sikorsky covering direct procurement of forty-five Black Hawk helicopters, with an additional fifty helicopters to be coproduced in Turkiye by 1999.

By 2020 Turkiye was an emerging aerospace hub for markets in Europe, the Middle East, the Caucasus, and North Africa. Given Turkiye’s proximity to developed and emerging markets (over 50 countries are within a three-hour flight from Istanbul), as well as Istanbul’s role as a financial hub, Turkiye’s aviation and aerospace sectors maintain enormous potential.

Aviation, however, was impacted more than any other sector by the COVID-19 pandemic. In 2020, the passenger volume dropped to 82 million from 209 million in 2019, a decrease of approximately 60%. Analysts anticipate the aviation sector will increase its passenger volume to pre-pandemic levels by 2024.

In 2019, total cargo traffic increased to 2.4 million tons from 2.3 million tons. The completion of the new Istanbul Airport in April 2019 and the closing of Atatürk Airport after decades of service was a major milestone for Turkiye’s aviation sector. However, due to the pandemic, total passenger traffic at Istanbul Airport in 2020 decreased to 24 million from 68 million. Istanbul Airport maintained its position as Europe’s fifth busiest passenger airport and ranked ninth globally in hub connections. The Istanbul Airport, once all phases are complete, will have a 90-million passenger capacity and is expected to be the largest airport in the world.

According to a Turkish Exporters Assembly report, Turkiye was the third largest service exporter in aviation, generating $11.2 billion in service exports in 2018. Furthermore, in 2019, five of the top ten service exporters in Turkiye were aviation companies. Turkiye has seen growth in MRO activities, with several new MRO centers recently established in Istanbul. Turkish HABOM, based in Istanbul at Sabiha Gokcen Airport, is a large MRO facility consisting of a Turkish Airlines (THY)–Technic joint venture for wide and narrow-body aircraft repair and maintenance. Sabiha Gokcen also hosts an engine repair shop and various other MRO facilities of varying size and scale.

The Turkish Space Agency (TUA) was established in December 2018 to develop technologies for rocket launches and space exploration and coordinate all commercial space activities. Although the agency reports to the Ministry of Industry and Technology, it has financial and administrative autonomy. TUA coordinates space efforts for relevant Turkish entities by streamlining their activities and serving as the main point of contact for international organizations. The GoT already funds several space research centers and TUA will coordinate their activities, as well as those of Turkish Aerospace Industries (TAI), Roketsan (Turkiye’s leading rocket producer), and Turksat (semi-private satellite organization).

Turkiye’s total budget amount allocated to the space program has reached $1 billion. Turksat 6A, the first domestically designed and manufactured telecommunications satellite, was allocated $546 million and is expected to be completed in 2021. Upon completion of the Turksat 6A, Turkiye will join the league of 10 countries with communication satellite production capabilities.

Turkiye’s space sector is generally seen as an untapped market with significant opportunities for U.S. company involvement, as it is heavily import-reliant, specifically at the component level. Although Turkiye has some design capability, it relies on imports for smaller components such as chips, circuits, and heat-resistant materials.