At White House, Erdogan to seek deal with Trump on F-35s

Turkish President Erdogan is meeting with U.S. President Trump at the White House, seeking to leverage improved bilateral ties to lift sanctions and enable the purchase of F-35 fighter jets, a sale currently blocked due to Turkey's acquisition of Russian S-400 missile defenses. The agenda also includes discussions on ongoing negotiations for 40 F-16 jets and a significant potential deal for Turkey to acquire over 200 Boeing aircraft, including 787 and 737 jetliners, with an estimated $10 billion in GE aircraft engines, signaling potential large-scale defense and commercial aerospace contracts despite existing geopolitical friction.

Analysis

The meeting between the U.S. and Turkish presidents signals a potential shift in bilateral relations with significant implications for the aerospace and defense sectors. A major commercial opportunity is emerging for Boeing and GE Aerospace, centered on a potential Turkish Airlines order for over 200 Boeing 787 and 737 aircraft, coupled with approximately $10 billion in GE engines. This negotiation appears to be a focal point with high-level support. In the defense sphere, the situation is more complex. While Turkish ambitions to acquire Lockheed Martin's F-35 fighter jets are being discussed, a sale remains legally blocked by U.S. sanctions imposed over Turkey's possession of the Russian S-400 missile system. Despite President Trump's optimistic remarks, the F-35 was explicitly omitted from a draft statement of intent, indicating this hurdle is substantial. More tangible in the near term is the ongoing negotiation for 40 F-16 jets, for which a draft statement has been prepared, representing a more probable, albeit less advanced, air power upgrade for Turkey. The geopolitical landscape remains a key variable, as disagreements on issues like the Gaza conflict could introduce volatility into these otherwise transactional discussions.

Key Decisions for Investors

• Investors should view the potential Turkish Airlines order as a significant positive catalyst for Boeing (BA) and GE Aerospace (GE), warranting close attention to any formal announcements, as this represents a more concrete opportunity than the defense-related talks.
• For Lockheed Martin (LMT), the potential for an F-35 sale is a long-term, high-risk, high-reward scenario; investors should prioritize monitoring progress on the more immediate F-16 sale while treating the F-35 discussion as speculative until sanctions are formally addressed.