Turkey says defense firms face 'temporary' losses after F-35 removal but will 'emerge stronger'

Turkish defence companies may face temporary losses after a U.S. decision to remove Ankara from the F-35 fighter jet programme but the industry will emerge stronger as a result, the head of Turkey's Defence Industry Directorate said on Thursday.

The United States says it is removing Turkey from the F-35 jet programme over its purchase of Russian S-400 defence systems, which Washington says could compromise the stealth capabilities of the F-35 jets.

Turkey has dismissed those concerns and last week took delivery of the first shipment of S-400 parts, prompting Wednesday's decision by Washington to end Turkey's involvement in the F-35 programme. Turkish firms had been producing F-35 parts and Ankara had ordered more than 100 of the jets.

Speaking to reporters in Ankara, Ismail Demir said the move was unilateral and not in line with the agreement signed between the parties, and added that Turkey would continue meeting its commitments until its exclusion from the programme is finalised.

"It is a controversial decision that has no place in the signed agreements. We are waiting for this to become official," Demir said.

"Our companies may face losses initially, and even though issues like sanctions and more may lead to temporary losses for the defence industry, we think it will result in our defence industry becoming stronger," he said.

The Pentagon said on Wednesday that Turkey produces more than 900 parts of the F-35, and added that the supply chain would transition from Turkish to mainly U.S. factories as Turkish suppliers are removed.

It said Turkey would no longer receive more than $9 billion in projected work share related to the F-35 over the life of the programme, and added that it would not be able to receive the F-35s it had ordered.

Moving the supply chain for the jet would also cost the United States between $500 million and $600 million, it said.

Demir said Turkish defence companies would evaluate how to compensate for their losses from Turkey's removal, but added that other countries involved in the F-35 programme would face extra costs of $7-8 million per jet as a result of the move.

He also said Turkey would not purchase foreign defence equipment from now on unless it was absolutely necessary, but did not elaborate further.

The S-400 acquisition is one of several issues that have frayed ties between the two allies, including a dispute over strategy in Syria east of the Euphrates River, where the United States is allied with Kurdistan Workers' Party (PKK) terrorists.