US embassy cable - 04ANKARA2680

S E C R E T ANKARA 002680 
 
SIPDIS 
 
 
STATE FOR EUR/SE, E, EB 
COMMERCE FOR MAC ASSISTANT SECRETARY WILLIAM LASH 
COMMERCE FOR ITA/EUR/RD/SLETTEN/MCOSTA 
COMMERCE FOR ITA/THE ADVOCACY CENTER/NEWMAN 
NSC FOR MBRYZA/TMCKIBBEN 
COMMERCE FOR MAC/EUR/DDEFALCO/PDASCHER 
ISTANBUL FOR ECON AND FCS 
AMEMBASSIES FOR ECON AND FCS 
 
 
E.O. 12958: DECL: 06/01/2010 
TAGS: BEXP, ECON, ETRD, TU 
SUBJECT: BOEING FEELS PRESSURE IN THE TURKISH MARKET 
 
 
(U) Classified by DCM Robert Deutsch; Reasons 1.4 b and d. 
 
 
1. (C)  Summary: Boeing representatives continue to be 
concerned over attempts by a senior official of the AKP 
cabinet to pressure the company into hiring one of his 
associates as Boeing's representative in Turkey.  Boeing is 
currently competing with EADS-Airbus for the potential sale 
of 19 narrow and wide body aircraft to expand the fleet of 
Turkish Airlines (THY).  In addition to puchasing 19 aircraft 
and extending lease options for eight B737-400 aircraft, THY 
anticipates a need for 35 additional planes to meet future 
demand.  End Summary. 
 
 
2. (C)  Earlier this week, Boeing representatives met with 
Embassy officials to discuss issues of concern to Boeing in 
the Turkish market.  Boeing is concerned over attempts by a 
senior member of the AKP cabinet to pressure Boeing into 
hiring one of his associates as Boeing's representative in 
Turkey  The state-owned Turkish flag carrier, THY, is 
currently interested in purchasing nineteen planes to expand 
its fleet.  In addition to this fleet expansion, THY is also 
looking to lengthen its lease on eight Boeing 737-400s, which 
expire in 2006.  THY expects a need for 35 additional planes 
to meet future flight demand.  This project, valued at more 
than USD 2.9 billion (approximately 85 percent U.S. export 
content), is one of the largest projects in Turkey in the 
past several years.  The German Chancellor and the French 
President have raised the upcoming THY acquisitions, on 
Airbus' behalf, with Prime Minister Erdogan in previous 
discussions. 
 
 
3. (S)  According to our Boeing contacts, Rafi Harlev, an 
Israeli national and former Director General of El Al, 
approached Boeing in March 2004 and introduced Boeing to a 
Turkish businessman named Mehmet Emin Erkan, Chairman, ERKAN 
Companies Group, and an Israeli businessman named Ramiz 
Aydasgil, Managing Partner, ExaGlobal Partnership.  Mr. Erkan 
advised Boeing that the Turkish Finance Minister was 
interested in meeting with Boeing to discuss THYs 
acquisition, and volunteered to arrange the meeting with the 
Finance Minister.  (Comment:  Senior THY management reports 
to the Finance Minister. End Comment). 
 
 
4. (C)  During Boeing's meeting with the Finance Minister, 
the Minister told Boeing that Mr. Erkan understands the 
airline business well and is fully aware of THYs 
requirements.  Immediately following the meeting with the 
Finance Minister, Mr. Erkan asked Boeing to retain him as 
their consultant in Turkey to ensure Boeing's success in this 
market.  Boeing declined Erkan's request. 
 
 
5. (C)  Comment:  Post remains concerned about extensive 
lobbying by senior EU officals and the heads of state of 
Germany and France on behalf of Airbus.  The Finance Minister 
is scheduled to meet with Airbus in Paris later this week. 
Post recommends that Washington agencies use all available 
opportunities to impress their GOT interlocutors on the 
importance we attach to transparency in THYs acquisition. 
Post will continue its active advocacy on behalf of Boeing. 
End Comment. 
 
 
EDELMAN