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Cablegate: Ambassador Discusses Boeing Sale With

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DE RUEHAK #0074/01 0190539
ZNY CCCCC ZZH
P 190539Z JAN 10
FM AMEMBASSY ANKARA
TO RUEHC/SECSTATE WASHDC PRIORITY 1704
INFO RUEHFR/AMEMBASSY PARIS PRIORITY 5499
RUEHIT/AMCONSUL ISTANBUL PRIORITY 6768
RUCPDOC/DEPT OF COMMERCE WASHDC PRIORITY
RHEHAAA/NSC WASHDC PRIORITY
RHMFISS/FAA HQ WASHDC PRIORITY

C O N F I D E N T I A L ANKARA 000074

SIPDIS

DEPT FOR EEB/FO, EEB/CBA, EEB/TRA/OTP, EUR/SE
PARIS FOR FAA TRICIA STACEY
COMMERCE FOR ITA/MAC CHERIE RUSNAK AND KRISTIN NAJDI
NSC FOR BRIDGET BRINK

E.O. 12958: DECL: 01/14/2020
TAGS: BEXP ETRD EAIR PREL TSPA TU
SUBJECT: AMBASSADOR DISCUSSES BOEING SALE WITH
TRANSPORTATION MINISTER

REF: ISTANBUL 17

Classified By: Ambassador James Jeffrey for reasons 1.4 (b) and (d).

1. (C) Summary. Minister of Transportation Binali Yildirim
confirmed to Ambassador Jeffrey that price is now the main
sticking point in the prospective purchase of Boeing aircraft
by Turkish Airlines (THY). Yildirim stressed, however, that
price is not the only consideration and that THY is looking
at the (vague) associated conditions for evidence of a
long-term partnership and commitment. He added that the GOT
is also hoping for a heightened level of civil aviation
cooperation with the FAA, and that progress on that front
would improve the environment for Boeing as well. Finally,
he repeated President Gul's request to President Obama for
assistance in sending a Turkish astronaut into space, and
hinted that this was tied into Turkey's consideration of
commercial deals. The Ambassador highlighted Boeing's long
history of cooperation with and investment in Turkey, not
only through partnerships with local firms but also via
direct investment in the community through its corporate
social responsibility programs. He also promised to discuss
the possibilities for cooperation with FAA and investigate
whether NASA could help facilitate the Turkish space program.
End summary.

2. (SBU) Ambassador Jeffrey, accompanied by Commercial
Counselor and Econoff, met with Minister of Transportation
Binali Yildirim on January 14 to advocate on behalf of Boeing
in the ongoing procurement of new airplanes for the THY
fleet. THY recently announced that it would be purchasing 20
Airbus single-aisle aircraft with an option for 10 more.
Negotiations with Boeing for a similar number of 737s are
ongoing (see reftel). The value of this deal is
approximately USD 3.4 billion.

3. (C) The Ambassador, alluding to the discussions between
President Obama and Prime Minister Erdogan, noted his
understanding that the main sticking point in the
negotiations now seems to be on price (as was expressed by
THY CEO to CG Wiener in reftel). Yildirim confirmed that
price is the most important outstanding issue and observed
that haggling over price is a normal part of any business
negotiation. He went on to say, however, that price is not
the only consideration, and that THY and the GOT are looking
at the offer carefully with an eye toward after-sale service
and long-term partnership. Ambassador Jeffrey highlighted
Boeing's longstanding commitment to Turkey, its history of
cooperative production with local manufacturers, its
world-class corporate social responsibility programs, and the
superior quality of its products.

4. (C) Yildirim added that the GOT is evaluating the Boeing
offer in the context of Turkey's overall civil aviation
cooperation with the United States, especially in terms of
cooperation between the Ministry and the FAA. He noted that
Turkey needs to strengthen both its technical infrastructure
and its human capacity to meet the growing demand for
aviation services, and expressed hope that the FAA could
provide assistance on all these fronts. Cooperation in this
area will create the right environment for commercial deals,
he said, without going into specifics on what type of
assistance is necessary. A frustrated Ambassador observed
that FAA has a solid history of collaboration with the Civil
Aviation Directorate General and promised to investigate how
the USG might best lend assistance.

5. (C) In addition to FAA assistance, Yildirim hinted
obliquely that Turkey's desire to send an astronaut into
space -- expressed in a letter from President Gul to
President Obama -- is also tied into its consideration of
commercial deals, and that NASA assistance to help stand up
Turkey's nascent space program would be viewed positively.
Ambassador Jeffrey noted that scheduling a Turkish astronaut
on an upcoming mission would be extremely difficult, but that
other technical assistance from NASA in establishing Turkey's
space program might be a possibility.

6. (C) Comment: Yildirim's conflation of USG-GOT interactions
and what is ostensibly a commercial sale between private
firms suggests an unwelcome, but unsurprising, degree of
political influence in this transaction. His comments may
also explain the confusing mention of offsets by Prime

Minister Erdogan in his meeting with the President - if the
GOT is truly evaluating the sale as a "U.S." offer rather a
Boeing offer, then the desired "offsets" may have been from
the USG rather than Boeing. While there should not be a link
between this deal and FAA/NASA assistance in developing
Turkey's aviation and aerospace agencies, such assistance in
and of itself could be mutually beneficial and merits further
study. We probably cannot put a Turkish astronaut in orbit,
but there are programs we could undertake to strengthen
Turkey's capacity in this area that would meet our own goals
for improved aviation safety in the region. In any case, we
must/must show some response to the Minister's vague requests
if we want to maximize chances for the sale. End comment.

Jeffrey

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