The European Investment Bank is providing up to EUR 500 million of loans to Turkish Airlines (THY) for the expansion and renewal of its aircraft fleet between 2005 and 2008. Rising demand for air travel and the company's ageing fleet are making the modernisation and renewal of THY a key challenge for the company's development. To support the airline, the EIB is lending EUR 500 million for the part-financing of 36 Airbus aircraft as well as two flight simulators, which will be based at Istanbul Atatürk International Airport.
THY aims to capitalise on a significant increase in international business and leisure traffic and intends to maintain its lead in the domestic market with its modern aircraft family. Responding to the sharp increase in passenger traffic in recent years, Turkish Airlines has recently announced 24 new destinations strengthening the Company's position as a global airline.
THY is Turkey's national flag carrier. Founded in 1933, it is predominantly a scheduled passenger services airline with advanced technical services facilities as well as a provider of cargo, mail and other services. As at the end of 2005, the company carried some 14.1m passengers and served 94 international (of which 57 in Europe) and 28 domestic destinations.
Wolfgang Roth, EIB's most senior Vice-President, said the project's importance for Turkey's economic development and the country's European integration are self-evident. THY's innovative strategy and expansion make it a showcase for the country's dynamism and help to improve the necessary transport networks for Turkey's strong growing economy.
The European Investment Bank is an important financier in the aircraft sector and has invested, since 2000, in the EU as well as in partner countries a total of EUR 1.7 bn for passenger aircraft and freighters. The Bank's cumulative financing in Turkey stands at over EUR 4.5 billion and relates to investments in a wide range of key economic sectors.