Turkey’s Pegasus Said to Order 100 Airbus A320 Worth $10 Billion

Airbus SAS is poised to win an order from Turkish low-cost carrier Pegasus Airlines, a long-time Boeing customer, for as many as 100 A320neo single-aisle aircraft, three people familiar with the talks said.

Pegasus plans to take 75 planes on firm order, mixing A320neos and the larger A321neo variant, said two of the people, who asked not to be named because talks are private. Pegasus, with 42 Boeing 737s in its fleet, may make an announcement, including 25 options, as early as tomorrow, the people said.

The A320eo is a variant of the existing A320 with more efficient engines, and has helped Airbus persuade loyal Boeing customers to consider the alternative, making the aircraft the fastest-selling jet in aviation history. Boeing plans to deliver its competing 737 MAX in late 2017. The firm part of the Airbus order would have a value of about $8 billion at list price.

Turkish carriers have been adding routes to neighboring countries and raising capacity on domestic flights to attract more customers. That’s led to higher earnings even as airlines elsewhere lost business in the global slump.

The number of passengers carried in the Turkish air grew by 10 percent from a year ago to 121.8 million in the first 11 months of this year, according to government data.

Pegasus Havayollari AS is owned by Esas Holding AS and was established in Istanbul in 2000, according to the company website. It flies to 61 destinations in 24 countries, mostly in Europe. It is slated for an initial public offering in 2013.

Its main competitor is the flag carrier Turk Hava Yollari AO, or Turkish Airlines (THYAO), which is controlled by the government and has 202 aircraft in its fleet.

Airbus offers a choice of engines by United Technologies Corp. (UTX)’s Pratt & Whitney or by CFM Intl., a venture between General Electric Co. (GE) and SafranSA. Pegasus will choose engines next year, one of the people said. Reuters reported earlier today that Pegasus is considering the purchase of as many as 100 Airbus aircraft, citing people it didn’t identify.

To contact the reporters on this story: Andrea Rothman in Toulouse at aerothman@bloomberg.net; Ercan Ersoy in Istanbul at eersoy@bloomberg.net

To contact the editor responsible for this story: Benedikt Kammel at bkammel@bloomberg.net

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