The agreements follow several years of political disputes between the two nations, which decided to reconcile their differences in 2022. And the two countries in July 2023 signed 13 agreements valued at $50.7 billion, which saw the UAE invest in Turkey’s defense and space sectors.

The accords were signed during a defense industry event in Ankara, Turkey, jointly held by Istanbul-based defense expo business SAHA and Edge Group. The gathering included 10 of Edge Group’s subsidiaries and 125 Turkish defense companies.

The Turkish firms included military electronics specialist Aselsan, the country’s largest defense company; aeronautical technology heavyweight Turkish Aerospace Industries; engine producer Tusas Engine Industries; missile maker Roketsan; drone manufacturer Baykar; military software producer Havelsan; and the state-controlled defense technologies firm STM.

“There is already a large-scale defense industry cooperation with the UAE. At this event we signed letters of intent to upgrade this relationship with the participation of small and medium-sized [defense] entities. We are aiming at synergy,” said Haluk Bayraktar, SAHA’s president and board chairman of Baykar.

As part of the new agreements, Edge Group has set up an organization in the UAE dubbed MALATH to handle the conglomerate’s cooperation with SAHA.

“MALATH’s only task is to coordinate UAE-Turkey defense programs. These programs will involve joint projects, direct [defense industry] trade, investment and co-production,” Bayraktar said.

In remarks quoted by Ukrinform news agency, company CEO Haluk Bayraktar told Defence Industries Forum in Kyiv earlier this month that the footprint will include a production facility, a service center and a head office. “The construction has already begun,” he said. “It will take about a year and a half to complete. We plan to employ at least 300 people here. Cooperation continues.”

A Baykar official, speaking on condition of anonymity because he is no authorized to speak to the media, said top executives view Ukraine as a “long-term, strategic partner rather than just a market.”

He said that building a production unit would absorb much of the planned investment, with plans including an “assembly line, composites and a planned engine unit.”

In Kyiv, Bayraktar said that the envisioned investment would be self-sufficient, eco-friendly and mutually beneficial since Ukraine has unique technologies for producing engines that power Turkish drones.

“We also face some challenges. These are the supply chain, the search and development of human capital through the impact of war and the regulatory environment, especially the rules that will support these investments,” he said.

Baykar started by acquiring land for the production unit in Ukraine. It won permission from the Ukrainian government to produce its TB2 and Akinci drones in the country in June. A month later, the company started constructing the plant.

But in August, Russian missiles struck the facilities of Ukrainian aircraft and engine manufacturer Motor Sich, a company deemed of strategic importance to Turkey’s local industry. Motor Sich had been taken over by the Ukrainian government in November 2022 as part of Kyiv’s war effort. The region housing the company’s headquarters, Zaporizhzhia, is partly occupied by Russian forces.

Motor Sich has strategic ties with the Turkish aerospace industry. The company and its affiliate Ivchenko Progress have been providing the AI-450 engines for Turkey’s most prominent armed drone, the Akinci, and their AI-25TLT for the Kizilelma, an unmanned fighter jet in the making and Anka-3, another combat drone. The Akinci and Kizilelma are built by privately-owned Baykar while the Anka-3 is produced by Turkish Aerospace Industries (TAI). Motor Sich engines also power TAI’s ATAK II, a heavyweight attack helicopter. Talks were underway for a Motor Sich engine to power the T925, TAI’s utility helicopter.

A presidential aide in Ankara ruled out a Russian attack on Baykar’s Ukraine production unit, without elaborating why such a strike is deemed unlikely.

Several local companies are already developing unmanned ground vehicles in the hopes their products will be combat-proven by the Turkish military, which would make these systems more attractive on the foreign market.

“This is an almost endless market given Turkey’s [unmanned] technological capabilities and the future requirements of the militaries particularly in the Middle East, Caucasus, Africa and Asia,” according to a presidential aide whose portfolio includes the local defense industry. He spoke to Defense News on the condition of anonymity because he was not authorized to talk to the media.

Katmerciler, which specializes in anti-riot vehicles, is one private business seeking a foothold in the unmanned market. In partnership with military electronics specialist Aselsan, Turkey’s largest defense firm, Katmerciler won a Turkish government contract Jan. 3 to develop and produce the Tunga, a medium-weight, tracked unmanned ground vehicle.

The hybrid-powered Tunga can operate for up to six hours, plus another hour and a half with its battery. The multipurpose system can carry weapons and ammunition, and its design allows for maneuverability in urban areas.

“This will be the first vehicle of its kind to enter the inventory of the Turkish military,” Fahrettin Akpak, head of Katmerciler’s research and development department, told the media in August. “In addition, we are assessing export opportunities.”

Another private company, Otokar, has developed Turkey’s first heavyweight unmanned vehicle. The stealthy Alpar can carry a payload of up to 15 tons, and the company says it built the vehicle to minimize personnel loss and human deployment to the battlefield.

The remote-controlled vehicle, which can also carry a miniature unmanned ground vehicle inside its body, was made for reconnaissance, fire support, logistical support and anti-tank warfare missions. Its electric engine has a maximum range of 50 kilometers (31 miles). In hybrid mode, it can operate for up to 500 kilometers.

“UGVs have gained special prominence in countries like Turkey that face asymmetrical warfare threats. Such vehicles will be used in greater numbers as part of network-centric warfare concept,” according to independent defense industry analyst Kaner Kurt.

Indeed, Turkish military planners are interested in operating multidomain drone swarms. In August, the government-controlled military software company Havelsan said it successfully tested this concept, which demonstrated interoperability between two Baha sub-cloud — or low-altitude — unmanned aerial vehicles; two Barkan unmanned ground vehicles; and a swarm consisting of five drones.

“In 2020, the design and development studies of the unmanned ground vehicle Barkan were conducted, the first power supply was provided and the first run was conducted at the end of the year. In the same year, the first design and development studies of the Baha sub-cloud unmanned aerial vehicle began, and the first test flight of Baha was conducted five months later,” Havelsan told Defense News.

The company’s CEO, Mehmet Akif Nacar, said the test also showed “how UAVs could perform reconnaissance, track targets and direct UGVs to the designated targets.”

Havelsan has already delivered the Barkan to the Turkish military. The company also has plans to deliver the Baha to the government, though that timetable is unknown.

“The idea is to sell [export] aerial and ground vehicles operated as a single unit,” Nacar said, noting a Central Asian country has shown interest in the Baha, which would be the vehicle’s second export contract. He did not identify the first customer.

The Middle Eastern, African and Central Asian markets have shown interest in the Baha and Kapgan, Nacar added, and “we are working on integrating different payload demands from different [potential] buyers.”

The Kapgan is an unmanned ground vehicle with a speed exceeding 25 kph (16 mph). The vehicle can operate for six hours, perform autonomous patrol missions and features a 30mm gun.

“Could the Turkish industry repeat the success story it has had in aerial systems in land systems? I think the answer is a cautious ‘yes,’ ” an Ankara-based expert on unmanned systems told Defense News on the condition of anonymity due to the sensitivity of the topic. “The most critical point is whether the local industry will achieve the aerial cost efficiency in land systems too. That, we don’t know. But initial signs are quite promising.”

Tayfun Ozberk in Mersin, Turkey, contributed to this report.

This is the first export contract for the Karaok system, Turkish officials said. The officials, speaking on the condition of anonymity, did not formally confirm the deal because they were not authorized to speak to the media.

One procurement official said Roketsan defeated three rivals to win the Malaysian contract, including contenders from South Korea and China. An industry source estimated the contract price at around $20 million.

Defense News has contacted Roketsan and the Malaysia Embassy in Turkey for further information on those who bid for the contract, as well as the sale’s value.

One Roketsan official said the Karaok system is capable of engaging and destroying armor and fortified bunkers at a distance of 2-4 kilometers (1.2-2.5 miles).

The Karaok features imaging, infrared homing guidance. The weapon’s diameter is 125mm diameter, it weighs less than 16 kilograms (35 pounds), and the system incorporates an armor-piercing tandem warhead. It offers both direct and overhead strike modes with a fire-and-forget mode.

The Karaok system will come with six missiles for each launcher — 18 launchers in total. The system will also include indoor and outdoor simulators as well as test equipment.

Once in service, the Karaok system will replace the Soviet-era Metis-M currently fitted on four-wheel drive G-Wagen vehicles. The Karaok weapons will be deployed on Cendana Auto light armored vehicles.

The Karaok is the Turkish equivalent of the FGM-148 Javelin guided anti-tank missile, jointly produced by Lockheed Martin and RTX. The American-made weapon has recently gained notoriety from its use by Ukraine as it fights off a Russian invasion.

Roketsan began to develop the Karaok in 2016. The company showcased the system at the IDEF exhibition in Istanbul in 2019. The Karaok successfully completed its first guided test fire in 2020 and entered the Turkish military’s inventory in 2022. The Turkish Army has ordered 300 Karaok systems.

The Turkish economy is experiencing high inflation, and the country’s external debt reached nearly $476 billion in March. The international insurance company Allianz Trade reported the stock of total external debt due within the next 12 months has risen to about $250 billion.

“Inevitably, the TF-X program will face financial difficulties in line with the country’s economic situation,” Ozgur Eksi, a defense analyst in Ankara, told Defense News.

However, Turkey is seeking foreign partners, which could lessen its own financial burden in regard to the program.

Turkish Defence Minister Yasar Guler said Aug. 14 Pakistan was about to sign an agreement to participate in the development of the fifth-generation fighter. “Friendly and brotherly countries are also making efforts to become partners in this project. An agreement was signed with Azerbaijan. There are other countries that are also about to sign, like Pakistan,” Guler said.

If Pakistan joins the Turkish program, it would be its second international fighter partnership following a deal with China on the JF-17 built by Pakistan Aeronautical Complex and Chengdu Aircraft Corp.

As for Azerbaijan, the government there signed a protocol with Turkey to explore involvement in the TF-X program.

“With the protocol, it is aimed to determine the working procedures and principles of cooperation with Azerbaijan on joint production issues, including the development activities of the 5th-generation national combat aircraft Kaan, which is being developed for the Turkish Air Force,” according to the Turkish Defence Industry Agency, using the government’s chosen name for the TF-X aircraft.

The agency, otherwise known as SSB, did not reply to Defense News’ questions on the TF-X and specifically Pakistan’s current status in relation to the program.

The Pakistan Air Force declined to comment on the status.

“Getting in foreign partners is like subletting part of your house: You share expenses, but disputes become inevitable and troubleshooting takes much longer than normal,” Eksi said. “Hydrocarbon-rich Azerbaijan has money. Pakistan does not but could transfer know-how. Once combat-proven, the Kaan could be an option for countries without access to Western-made fighter aircraft.”

Eugene Kogan, a defense analyst based in Tbilisi, Georgia, said Azerbaijan appears ready to bring money to the table.

“As for Pakistan, I wonder what exactly it can bring to the table. Not money, obviously. Technological know-how? More questions than answers,” he told Defense News.

Future flight

The government wants to fly the planned aircraft this year, the centennial of the Turkish republic. Turkish Aerospace Industries said the TF-X will fly Dec. 27, 2023.

Under the program, TAI will deliver 20 TF-X Block 10 aircraft to the Air Force in 2028. The company said in March the per-unit price will be $100 million, but noted in May it could be “a little bit higher.” By 2029, TAI plans to produce two TF-X fighters per month, generating an annual revenue of $2.4 billion.

“In all probability, the aircraft will fly for political purposes before critical local elections [in March] but without most systems fitted into it,” a program insider told Defense News on the condition of anonymity, fearing prosecution for discussing the subject. “Most Turks will not know or care if the aircraft is ready for any mission. It will be a piece in [the] government’s showoff.”

Turkey launched the TF-X program in 2009. In October 2016, British firm Rolls-Royce offered a joint production partnership to Turkey with a view to powering planned Turkish platforms and potential sales to third parties. The company’s proposal, which still stands, would see a production unit in Turkey manufacture engines for the TF-X as well as helicopters, tanks and missiles.

In January 2017, the British company BAE Systems and TAI signed a deal worth more than £100 million (U.S. $127 million) to develop the Turkish fighter jet. Presently there are about 30 BAE engineers working at the TAI production unit for the TF-X.

Then in 2022, the Turkish government launched a competition for the local development of a turbofan engine to power the TF-X. Three competitors are in the running: Tusas Engine Industries; TRMotor; and TAEC, a joint venture between Rolls-Royce and Turkish industrial conglomerate Kale, which owns 51% of TAEC.

TAEC has pitched an engine expected to fly the aircraft at a maximum altitude of 40,000 feet and help it reach a speed of up to Mach 1.8.

It’s unclear what TRMotor is offering. The company was founded in 2017 by SSTEK, a subsidiary of SSB. Tusas, which is the parent company of Tusas Engine Industries and Turkish Aerospace Industries, wholly owns TRMotor.

Tusas Engine Industries is developing TEI-TF6000 and TEI-TF10000 engines, referring to them as a prelude to what it will produce for the TF-X. TEI is a government-controlled business founded in 1985 as a joint venture involving the American firm GE Aviation (now GE Aerospace), Turkish Aerospace Industries, the Turkish Aeronautical Association, and the government-owned Turkish Armed Forces Foundation.

SSB plans to build TF-X prototypes using the American-made F110 engine. The General Electric F110 is an afterburning turbofan jet engine produced by GE Aerospace, and it uses the same engine core design as the company’s F101. The engine is also built under license by Tusas Engine Industries.

Turkey wants to use the F110 in serial production, but powering the TF-X with the engine may prove difficult because serial production could require vast amounts of investment and tests. Furthermore, this option would come with the same export license and intellectual property rights as Rolls-Royce’s offer, which the Turkish government dislikes.

Eksi said the government shouldn’t delay its engine choice any longer.

“Every [engine] proposal has advantages and disadvantages. Ankara must make a decision at once before it’s too late to move onto the serial production phase at feasible costs,” he explained.

Ultimately, the TF-X’s export potential is key to the program’s success, Eksi added.

“There are several countries that cannot buy Western-made aircraft for political reasons. Some of those countries also want to avoid Russian- or Chinese-made aircraft, also for political reasons. The Kaan could be what they’re looking for.”

Usman Ansari in Islamabad contributed to this report.

The state-controlled Turkish company said in a news release that the net profit during that time period rose to 5.4 billion liras (U.S. $199.1 million).

Aselsan said its orders, as of the end of June 2023, reached $8.4 billion. Total sales in the first half of the year came in at 18.1 billion liras, up 67% from the same period last year.

The company said its engineers managed to “nationalize” — or replace imported equipment with homemade versions — 68 systems. In the past five years, Aselsan said, it did the same for 738 systems, and that its effort led to savings worth $900 million for the national economy.

Ahmet Akyol, the recently appointed CEO of Aselsan, attributed the growth to the company’s “increasing competitiveness in local and foreign markets and its posture as a reliable technology company.”

Akyol said the firm now aims to boost its exports by focusing on high-tech systems while developing more indigenous equipment.

Aselsan is the 47th largest defense company in the world, according to Defense News’ Top 100 list, which ranks firms by their defense revenue. That’s up two spots from last year, despite an 11% drop in defense revenue from fiscal 2021 to fiscal 2022.

Roketsan developed the Atmaca system with surface warfare in mind. The weapon is a high-precision anti-ship missile that can arm assault boats, frigates and corvettes.

Roketsan says the system is autonomous, has a low radar cross section, can operate in all weather conditions, and features resistance to countermeasures. The company also boasts a 3D mission planning capability as well as target-update and mission-abort features via data link.

The Atmaca can fall between 4.3 meters and 5.2 meters in length. It weighs 750 kilograms (1,653 pounds) and has a range of 220 kilometers (137 miles). The system’s warhead weighs 220 kilograms.

It uses both an inertial navigation system and global positioning system for guidance.

The Atmaca will replace Turkey’s aging inventory of more than 350 American-made Harpoon missiles. STM said the integration of Atmaca missiles to the naval platforms will be completed by April 11, 2027.

Turkey will likely equip I-class frigates, the upgraded Barbaros-class Meko 200 TN and Ada-class corvettes with the Atmaca, according to Ozgur Eksi, an Ankara-based defense analyst.

Roketsan won the development contract from the Turkish government in 2009. In 2018, Roketsan teamed up with military-electronics specialist Aselsan, Turkey’s largest defense firm, to jointly manufacture Atmaca, which incorporates features of the Harpoon weapon and the French-made Exocet missile.

The Turkish government is expected to save up to $500 million by choosing the Atmaca to replace its Harpoon missiles, as the homemade weapon is about half the price of the American-made option.

Atmaca’s land variant, known as the Kara Atmaca, is a jam-resistant, long-range cruise missile system launched on tactical wheeled vehicles.

The Aug. 6 missile and drone attack across Ukraine killed six people, Kyiv officials said. Ukrainian President Volodymyr Zelenskyy said the Zaporizhzhia-based facilities of Motor Sich, which his government took over in November, also came under attack.

The privately owned business Baykar builds the Akinci and Kizilelma drones, for which Motor Sich provides engines.

Eugene Kogan, a security and defense analyst based in Tbilisi, Georgia, said Russian President Vladimir Putin was essentially telling his Turkish counterpart Recep Tayyip Erdoğan: “Despite our friendly relations and respect to each other, your son-in-law’s undertaking in Ukraine will cost him dearly” — a reference to Baykar chairman Selcuk Bayraktar, who is married to one of the Turkish president’s daughters.

“Any military facility in Ukraine, local or foreign, is a legitimate target, and Russia is not going to be deterred by Ukraine to destroy such targets,” Kogan added.

Motor Sich and Ukrainian firm Ivchenko-Progress have been providing AI-450 engines for the Akinci drone, as well as AI-25TLT engines for the Anka-3 and Kizilelma drones. Turkish Aerospace Industries produces the Anka-3, and Baykar’s Kizilelma is still under development.

Motor Sich engines also power Turkish Aerospace Industries’ Atak II heavyweight combat helicopter. And talks were underway for a Motor Sich engine to power the T925, TAI’s utility helicopter. It’s unclear where negotiations now stand.

In 2019, LLC Avia Ventures, a Baykar subsidiary, obtained permission to produce its Akinci and TB2 drones in Ukraine, with work to start in 2025. In January of that year, Baykar won a $69 million contract to sell six TB2 systems to Ukraine.

Later that year, state-controlled Ukrainian company Ukrspecexport and Baykar signed a deal to develop and produce “sensitive technologies in defense and aerospace.”

And in 2021, Turkey and Ukraine signed a contract to establish a helicopter repair and maintenance facility in Ankara. As part of the deal, Motor Sich would provide spare parts and engine testing services.

Baykar and TAI did not reply to Defense News’ queries.

“We take it [the Russian missile attack on Motor Sich] as a symbolic Russian warning reflecting Russia’s discontent over a few Turkish initiatives,” a senior Turkish diplomat told Defense News on the condition of anonymity due to the sensitivity of the topic.

While Turkey is a member of NATO, it has maintained friendly relations with Russia. In 2017, Turkey bought the Russian-made S-400 air defense system, angering members of the Western alliance. But last month, Erdoğan met with Zelenskyy and backed Ukraine’s hopes of joining NATO.

Ozgur Eksi, an Ankara-based analyst, said the Aug. 6 attack “is a message both to Ukraine and to Turkey.”

“The Russian attack effectively kills co-production plans and any Turkish appetite to buy Motor Sich,” Eksi told Defense News.

A Turkish procurement official said the country has enough Ukrainian-made engines on hand to run, among others, its drone programs uninterrupted. The official was not authorized to speak to the press, and Defense News could not independently verify the claim.

However, Eksi said, “this may be a short-term solution, but not a relief from a long-term perspective.”

The Associated Press contributed to this report.

Military electronics specialist Aselsan, Turkey’s biggest defense firm, said July 23 that it launched the GÜRZ (“mace” in English) air defense system, designed to protect stationary units as well as military convoys on the move.

The weapon is “an answer to an increase in need to possess assets with strategic maneuvering capabilities,” Aselsan said.

It is designed to target very-low or low-altitude targets like artillery munition or missiles as well as drones, helicopters and fighter jets. The system comes fitted on a 8×8 wheeled platform.

Some analysts here have likened the GÜRZ to an advanced version of the Russian-made Pantsir, a self-propelled, medium-range, air-defense weapon.

Meanwhile, military software company Havelsan, also state-owned, said it delivered its new Barkan unmanned ground system to the Turkish military. Havelsan said it has been testing the robot over the past year and a half, incorporating a 12.7 mm weapon. The company plans to upgrade the system with grenade launchers and other missile variants.

Barkan II, the advanced version, features enhanced mobility. It doubles the vehicle’s weight capacity and is equipped to carry heavy weapons. The Barkan also will be displayed at IDEF 23, the manufacturer said.

The deals announced by Aselsan, a military electronics specialist, were for $1.2 billion and 20.7 billion liras (U.S. $789.2 million).

The Biden administration has backed Turkey’s desire to buy 40 new F-16s as well as modernization kits from the U.S. It’s a move some in Congress, most notably Senate Foreign Relations Committee Chairman Bob Menendez, D-N.J, have opposed over Turkey blocking NATO membership for Sweden, its human rights record, its relations with Greece and other concerns.

Neither TAI nor Aselsan revealed details of the contracts, inked July 13. But a government procurement official and sources with the businesses told Defense News that the contracts are related to a program to upgrade Turkey’s aging F-16s, starting with the Block 30 level.

The upgrade program will include a new mission computer, an active electronically scanned array radar and new avionic suites for about 150 Turkish F-16 aircraft. The program will also include new cockpit color displays, a new indigenous identification friend or foe system, a new system interface unit, a hydraulic fuel gauge, new radar warning receivers, and an inertial navigation system.

The backbone of the upgrade program is a subsystem dubbed Ozgur (”free” in English) that aims to develop and produce Turkey’s first AESA radar, which Aselsan officials hope will extend the flight time for some of the country’s F-16 aircraft by half, to 12,000 hours.

Per upgrade plans, the AESA radar will first be retrofitted onto the Akinci, a drone built by TAI; then on a batch of 36 F-16 Block 30 aircraft; and, in the longer term, the TF-X, Turkey’s first indigenous fighter jet in the making. Block 30 is the only F-16 model whose source codes are available to Turkey.

“This deal has two implications: One, it is part of Turkish efforts to balance Greece’s increasing air superiority over the Aegean Sea, especially by buying new French-made Rafales; and two, once [the upgrade is successful and the aircraft is] combat proven, it may pave the way for Aselsan and TAI to penetrate into the world’s large F-16 modernization market,” said Ozgur Eksi, who runs the media outlet TurDef.

In 2019, Turkey requested the Link 16 tactical data link, among other technology, for 199 F-16 jets. Then, acording to January 2023 media reports, the Biden administration “informally notified Congress of its intent to sell 40 new F-16s in the Block 70/72 Viper configuration (F-16Vs) and Viper upgrade packages for 79 existing fighters, along with 900 air-to-air missiles and 800 bombs, at an estimated total value of $20 billion,” a document from the Congressional Research Service noted.

And in April, the U.S. State Department publicly approved the sale of equipment and services to Turkey in support of upgrading the European nation’s F-16 fleet in a potential deal worth an estimated $259 million. The Congressional Research Service wrote this possible sale appears to include the Link 16.

The Turkish Air Force declined to comment for this story, citing national security.

Aselsan is the biggest defense company in Turkey, and the 49th largest in the world based on defense revenue, according to the Defense News Top 100 list.

The company reported its total sales in 2022 reached 35.3 billion liras, and that its pretax depreciation and interest profit was 9.5 billion liras, a 77% rise from the year prior. Its net profit in 2022 rose by 70% to 11.9 billion liras.

Aselsan also reported that, during fiscal 2022, it successfully “localized/nationalized” 160 systems, meaning the business indigenously produced technology that the country was previously importing. Overall, the company boasts to have done so for a total of 670 systems.

For its part, Turkish Aerospace Industries ranked 67th on the Top 100 list.

After his re-election on May 28, President Recep Tayyip Erdoğan shuffled the government’s procurement hierarchy. Ismail Demir, who led the Presidency of Defence Industries, or SSB, was appointed board chairman of government-controlled steel and iron producer Kardemir. Haluk Gorgun, Aselsan’s CEO, replaced Demir.

A June 22 statement from the company said Aselsan’s new CEO is Ahmet Akyol, formerly the firm’s deputy general manager. He continues to serve as a board member at Aselsan.

Akyol is a computer engineer who underwent training at the U.S. college Stanford University and the U.K. school Cranfield University.

Akyol has a background in industry and government, having worked at military software provider Havelsan and simulation specialist Quantum3D, and with the Ministry of Industry and Technology as well as the Ministry of Defense, plus the state scientific research agency Tubitak. He also previously served as the head of electronic warfare and radar systems at the SSB (then known as SSM).

The Associated Press contributed to this report.