Turkey Threatens To Cancel Boeing Orders

Beleaguered Boeing could find itself as collateral damage in an escalating war of words between the United States and Turkey.

Turkish Airlines, the 49% state-owned flag carrier of Turkey, has orders for 100 Boeing aircraft on the book. That includes 25 787-9 jets and 75 737 MAX jets. Both are scheduled for full delivery by 2023, though the 737 MAX woes have led to a missed deadline on five aircraft this year.

Turkish President Recep Tayyip Erdogan said:

I’ve told Mr. Trump in Osaka that even if Turkey’s not buying Patriots, it’s buying Boeings. We’re good customers. But if it goes on like this, we’ll have to rethink about this issue.

Erdogan is referring to Patriot missiles and Turkey’s recent decision to order a S-400 missile defense system from Russia rather than the United States. That decision roiled the USA and other NATO members, who viewed it as a betrayal from a fellow member. President Trump has vocally condemned the Turkish purchase on several occasions, heightening tensions.

Credible Threat?

On the one hand, Erdogan’s statement could be dismissed as a hollow threat…it’s not so easy to backfill 100 aircraft, even with up to four years of leadtime. It’s not like Turkey is going to buy Tupolev commercial aircraft to complement its missile defense system.

On the other hand, though, 3/4 of Turkey’s open order with Boeing is already in jeopardy simply by being 737 MAX aircraft. Cancelling the bulk of an order that may never be delivered anyway would make a statement. And Turkey would not be the first nation to place national pride above other political and economic goals. But even this seems far-fetched, especially because Turkey stands to collect damages from Boeing’s delivery delay, which may be mitigated if it cancels its orders now.

CONCLUSION

Words are a powerful sword. Perhaps Erdogan and Trump will merely engage in a rhetorical war of words. But Boeing cannot be comfortable in its position as a pawn in this ongoing diplomatic tiff.