TAI: A Global Giant in Aerospace Industry with its more than 25 years Experience

1-It is seen that TAI has taken significant achievements in 2009. In

Issue 21

2010-2014 period is important for us in the sense that while the indigenous products and the solutions that are developed by TAI in the area of Trainer & Transport Aircraft, Helicopters, UAVs and the Satellites will be part of the Turkish Armed Forces inventory, at the same time we will be seeking strong presence in the global market for these products and services by the method of direct sales or through international cooperation. Therefore, this is going to be a breakthrough period for TAI.

On the other hand, I would like to reiterate our commitment to meet the program schedules and performances as specific targets of 2010. This includes, but is not limited with the delivery of the 4th and the last S70 BlackHawk helicopter under the Yarasa Program, the delivery of the 1st upgraded T-38 Jet Trainer, successful performance of the 1st flight of T?HA, test and readiness of 1st upgraded C-130 and many others. In line with our stable development efforts, we will continue to pursue the opportunities to become a design and manufacturing partner in new product development projects in the field of world commercial aviation industries.

2-How do you evaluate the export activities of TAI in 2009? What are your 2010 targets in export business?

The volume of export of TAI has reached 175 M$ in 2009. However, it is expected that the exports will significantly increase within a couple of years with the potential sale of our indigenous products to the allied countries. Also, the commencement of the delivery of JSF/F-35 center fuselage and other components, the serial production of A400M structures and delivery of the aircraft to the customers, will feed the export capacity in the short-term with following 20-25 years life span.

By the year 2023, we are aiming to have an annual sales volume of 2 billion $, half of which is generated thru export revenues. It is imperative to present our capabilities and our products in the international market with the reference of Turkish Armed Forces. As being the leader of aerospace sector in Turkey, TAI has been faced with important growth dynamics leading the Company to the prime role in meeting the Turkish Armed Forces’ modernization requirements with indigenous solutions, in addition to the key partnering role for increasing business opportunities in the international aerospace market. The development is based on increasing value-add in the programs with intensive engineering and focusing on the critical systems solutions. Our indigenous products such as HÜRKU? Trainer, Turkish Unmanned Aerial Vehicle as well as the tailored solutions for the S70 BlackHawk, C130 and T38 platforms are among the examples of such a challenge. Another key project is the Attack Helicopter (ATAK) Program, where TAI is the prime contractor. We do see great potential for international cooperation as well as exports in connection with these projects.

Last but not least, TAI is actively pursuing new business opportunities in the field of civil/commercial aviation. With the historical record compliance of cost-quality-timely delivery parameters, it is targeted that commercial export volume of TAI will be significantly increased before the end of 2010.

3-What are your intended plans and targets in relation to marketing and export on international platforms? Could you additionally elaborate the priority districts as well as strategies concerning joint production and joint R&D?

We strongly believe that TAI’s participation in international aerospace projects will increase the value, the overall sales and export potential on such projects. There exist very good examples of our contribution on military and civilian projects such as A400M, JSF/F-35, A350 XWB and B787. In line with our strategies, we may participate in new international military and commercial aerospace projects in the future as a partner where conditions warrant that a meaningful work share can be allocated for us in terms of design and manufacturing. On the other hand, considering the current status of development and implementation process, TAI will be open to discuss international partnership in most of our programs as well. While some of the products and integration solutions of TAI are in the market now, and the others will be available in full spectrum in less than a few years. Consequently, it is our aim to become a key player with these products and solutions together with new derivatives in the global market. At this stage, we are exploring the working models together with allied countries at the early phase as “joint development partner” to adopt and harmonize their requirements with those of the Turkish Armed Forces, which has well-respected battlefield operational excellence. Moreover, this approach will help those partners to extend their capability base and to secure the lower costs of ownership through the life-cycle operation of such complex systems.

There will be significant export and partnering opportunities for our products such as T?HA-UAV and T-129 ATAK Helicopter as well as the modernization programs where TAI is playing an important role. However, TAI will be closely working with Turkish MoND and other concerned authorities in obtaining necessary approvals and licenses if and when required.

4. How do you assess TAI’s activities and recent situation regarding the modernization project of F16 aircraft in the inventory of the Pakistani Air Forces and the F16 for the Royal Jordan Air Force (RJAF)?

Being the second largest F-16 manufacturer in the world (with 250+ deliveries) following Lockheed Martin, TAI has a very good reputation around the world with her F-16 expertise and quality. Completed and ongoing structural/avionics upgrades for Turkish and Jordanian Air Force F-16’s on the other hand, make TAI a very capable and competitive company for modification programs as well. With our timely deliveries, flight testing and technical training packages, our customers become satisfied.

Due to those achievements, TAI is currently being invited to several F-16 upgrade tenders around the world, and like in the case of Pakistani Air Force, with its quality and competitive pricing, TAI was awarded. We are very closely following world F-16 upgrade market, and it would not be surprising if we all hear more of this type of awarding.

5- TAI is one of the very important major suppliers in the JSF/F-35 aircraft program.

Could you please inform us about the progress of your activities within this program?

TAI is spending every effort in order to maximize the work share of JSF/F-35 Program. JSF is one of the most challenging military programs in the world. Becoming a player in this program requires significant efforts. These efforts cover enhancing the existing technical capability and also require significant investment. This is what we are doing today. We started these activities in 2005 and it is ramping up every day. On the technical side, to meet the program requirements, TAI has improved its composite manufacturing technology and some of the most difficult composite components of the aircraft are now being manufactured at our facilities. The components we manufacture are not only for Turkish aircraft, but they are used for all global fleet. We have been delivering miscellaneous parts and components since last year and this delivery rate will continue to increase over the years.

TAI plans to reach 4-4.5 Billion US Dollars of sales within the scope of JSF/F-35 Program which will continue up to year 2034.

6-Could you please enlighten us about the activities of the A400M?

As you know, A400M Program is a multinational consortium effort among European nations. Even though the program has a long history, (previously it was known as Future Large Aircraft–FLA) design activities started in 2003. This program is TAI’s first “design-to-build” type of international contract. According to original contract, deliveries were going to start in 2009, but due to some technical difficulties, mainly engine development of the program, a certain delay became unavoidable. Last year the authorities of the launching nations made several meetings to find solution to the situation. And finally six Nation’s Defense Minister agreed on the continuation of the program with some contract amendments.

As of today, two test aircraft are flying, other two are in static and fatigue test. Other three aircraft will be flying within one year and in the meantime we are getting ready for serial production.

This military cargo aircraft is one of its kind in the world with the capabilities reached today. I firmly believe that once it is operational there will be a lot of export sales to several countries.

7- TAI has gained the technological experience in international programmes. Will new international project participations be considered in following period?

TAI’s experience, as a design partner, on A400M Program enabled TAI to receive new proposals from Airbus and the other companies as “risk sharing partner” status. We are bidding for a similar partnership with selected aircraft manufacturing companies for their newly developing aircraft. Today, when we look at the aerospace sector, interactions and cooperation within companies is often observed. TAI is one of the well known companies that can effectively establish such relationship. As the leading aerospace industry of Turkey, we have accumulated enough experience of building international relations so that we can provide contribution for international partnership in value, structuring and improvement of high quality and technology required. Consequently, in line with our strategies, that are set out in 2010-2014 Strategic Plan, we are considering to participate in new international projects.

8- Could you provide us some information the steps taken regarding ATAK projects since the maiden flight held in Milano at September?

Following the maiden flight of P1 (Prototype #1) on September 28th, the ATAK Preliminary Design Review (PDR) was concluded with the approval of Turkish Undersecretariat for Defense Industries (SSM), on October 15th, 2009. With the arrival of Airframe Mock-up at TAI’s premises on November 5th, physical implementation of the Digital Mock-up has been started. In April 2010, the Final Assembly line will be activated with the delivery of the P4 components from AgustaWestland. Critical Design Review (CDR), to be held separately for; Aselsan, AgustaWestland and TAI before final approval of SSM after TAI CDR, has already commenced and scheduled to be concluded in August 2010.

9. Could you please inform us about your UAV activities and the current developments in UAV programmes?

TAI’s UAV experience extends back to 1990’s. As the first UAV Project in Turkey UAV-X1 was initiated by SSM; and TAI indigenously developed and flight tested a tactical class UAV in 1992.

In 1997 a flying target prototype, namely Turna, was developed for the Ministry of National Defence and succeeded its first flights. Since then Turna is the first indigenous air vehicle to enter into services of Turkish Air Force and Turkish Army.

In 2005, a joint force Medium Altitude Long Endurance (MALE) class UAV development program was announced by SSM and TAI was awarded as prime contractor with the contract. A couple of years were spent to settle down with the requirements ranging from 1,5 ton to 4 ton vehicle. Finally 1,5 ton class was selected and in 2007 detailed design activities began. The first prototype to carry an ASELSAN electro-optic payload accomplished on April 1st, 2010. We expect to complete the extensive ground tests and make the maiden flight through the end of this summer. We planned a very busy flight test campaign and the first stage will be demonstrated in the first half of 2011. Second stage will cover a SAR Payload as a second simultaneous payload.

10- What is the current situation in TAI’s modernization, modification and systems integration activities regarding F-16 and C-130 modernization programs as well as Black Hawk, Meltem II and III, Peace Eagle programs that are in the inventory of Turkey and countries in the region?

YARASA (the Black Hawk Modernization Program), has accomplished a major milestone with successful synchronization of FMS (Flight Management System) with MSS (Mission Support System) before the delivery of third Helicopter on December 9th, 2009. Following the completion of the Program in 2010, the YARASA Avionics Suite is believed to receive a lot of interest from the neighboring friendly countries.

As the prime contractor of Erciyes C-130 Avionics Modernization Program, TAI is to upgrade 13 TuAF C-130 aircraft. This program includes;

• Design a new glass cockpit,

• Integrate next generation avionics systems,

• Design the Mission Computer,

• Develop the Operational Flight Program (OFP),

• Integrated Night Vision Goggle Compatible lighting system,

• Deliver a new Ground Mission Planning Station,

• Execute Logistics Support Activities such as training, technical publication, spare parts, etc.

Avionics package includes integration of the Weather Radar, Terrain and Traffic Collision Avoidance System (T2CAS), Automatic Flight Control System and Cockpit Management System with the Mission Computer.

Erciyes program will be unique in many ways as being the first aviation program to undergo a local airworthiness certification process. It will be the first Turkish program with a mission computer to host an Operational Flight Program developed and certified under DO-178B standards.

The modification tasks on two prototypes are nearing the end and OFP development and test activities are continuing as planned. First flight test is scheduled for May 2011.

For modernization programs such as Peace Eagle, Meltem II & III, TAI’s role is to act as subcontractor to design and perform platform modification.

TAI also keeps her eyes on other nations air platform modification needs in order to export technological capabilities gained with the current modernization programs. C-130 Avionics Modernization and Maritime Patrol & Surveillance Aircraft (MPA & MSA) programs have more potential in the region.

11- TAI has gained technological experience in helicopter projects such as Yarasa, Atak. It is expected that Turkish Armed Forces General Purpose Helicopter will conclude in the coming months. How do you assess the TAI’s position and activities within this project?

Turkish Utility Helicopter Program (TUHP) is a major tool, to secure the level loading of the shop in the coming decade with over 100 deliveries. Besides that, TAI will gain some critical technologies and infrastructure for indigenous helicopter development efforts. The volume of the work for Turkish industry in TUHP is at the level of Billion USD. Both of the two contenders have their superior sides, and whichever is selected by the Executive Committee in May/June period, Turkish Aviation Industry as a whole, will benefit most.

12-What are TAI’s activities related to space and what is TAI’s approach to space projects? Could you enlighten us the current position of Gokturk Programme?

TAI is continuously enhancing her space/satellite capabilities. Our aim, in satellite technologies, is to develop, test and manufacture the satellites which are needed by our country. We started with military remote sensing satellites but we are planning to do the same with civilian satellites as well. On the communication satellites we are in close coordination with TÜRKSAT management.

One of the key capabilities for satellite development is qualified engineering team from different disciplines and TAI, I believe, has the largest engineering staff in Turkey today. One other important point for satellite production which you have to have is an Assembly Integration and Test facility. The construction of such facility will be established in TAI territory this year.

Another important point in this sector is the collaboration with appropriate players like universities, institutions and industry. Today we are working with different Turkish partners and trying to maximize their contribution.

GOKTURK Program is on track and monitored very closely by SSM and the activities will be ramping up this year.

TAI’s vision in this area is to be one of the players in the world as satellite designer and manufacturer under competitive conditions.

13-Would you like to add a message for our readers?

TAI’s stable development strategy is based on becoming an aerospace industry with indigenous products and global competitive power. We believe that our products and services will contribute lowering the dependency in Turkey’s aerospace requirements at the same time will create sustainable growth in aerospace exports. As the major aerospace and defence systems require a wide and comprehensive capability base, TAI is working in close cooperation with not only major Armed Forces Foundation Companies such as Aselsan, Havelsan and Roketsan, but also with a number of small scale technological companies.

Knowing the fact that; our efforts of developing a technological aerospace industry and indigenous products are being supported by Turkish Armed Forces, Ministry of National Defence and Undersecreteriat for Defence Industries, increase our enthusiasm in this regard.

At this point, I would like to extend my deepest gratitude to Turkish Armed Forces, Ministry of National Defense, Undersecreteriat for Defence Industries, our shareholders and to all those who supported us continuously both in our past gains and future plans.

In conclusion, I would like to state with great confidence that we have the inspiration from Atatürk’s motto of ‘’build your own aero plane.’’ With this motivation TAI is developing and building not only for today but for the future of Turkey’s Aerospace.