Not Russian enough: USA stalls $2 bln Iran-Sukhoi deal

Entering international markets is quite a challenge for Sukhoi Civil Aircraft Company (SCAC) – the latest attempt to establish Russian-Iranian cooperation seems to be failing, as Sukhoi planes are not “Russian enough”.

Two Iranian carriers, Iran Air Tours and its subsidiary Aseman Airlines, which signed a $2 billion agreement to purchase 40 SSJ-100 aircraft from Sukhoi earlier last year, are now on hold to get their orders delivered.

US Office of Foreign Assets Controls (OFAC) did not reply to Sukhoi request to get the export certificate for the sale of SSJ-100 aircraft to Iranian carriers. The US approval for the transaction was needed, as Sukhoi aircraft contained more than 10% (22%, according to state news RIA) of American-made parts. SCAC claim they sent the request to the US Treasury, but no response was received by the end of 2018, Russian state news media TACC reports. “We have not received any response so far: neither positive nor negative,” commented Sukhoi press-service to RIA.

Iran Air Tours and Aseman Airlines signed agreements of intent with SCAC to buy 20 SSJ-100 aircraft each, in April 2018, at the Eurasia Airshow in Turkey. Back then, SCAC President Alexander Rubtsov said to Russian news media Vedomosti, that under agreement, aircraft deliveries were expected to start in 2020 and be fully completed by 2022.

Iranian side provided feedback on the issue on January 1st, 2018, revealing the details on the Russian deal current situation. “[…] It appears that due to the lack of license issued by OFAC, the arrival of the planes is out of question for now,” the secretary of Association of Iranian Airlines Maqsoud Asadi Samani told Iranian Labour News Agency ILNA. The option of exchanging the parts to lower the proportion of US-made parts was considered by Sukhoi manufacturer, but would take too much time, as noticed by Samani.

Meanwhile, Sukhoi plans to work on lowering the SSJ-100 international parts percentage. “At this point, we have made a firm decision to abandon the aircraft sale to Iran under the current conditions, taking into account the 22 percent of direct American equipment […]. As soon as we go below 10 percent, we will return to this issue,” SCAC President Alexander Rubtsov said in November 2018 during Airshow BIAS-2018 in Bahrain.

SCAC has been working on a version of its Superjet 100 that could avoid sanctions by relying on more indigenous parts. Sukhoi “Russified” Superjet 100 program with a bigger amount of Russian parts (including engine, navigational system and landing gear) is expected to be finished by 2020. The catalog price of one such SSJ100R is about $52 million.

As of 2018, Sukhoi has firm orders for different SSJ modifications with five international customers – Lao Central Airlines (Laos), Interjet (Mexico), Comlux (Switzerland), CityJet (Ireland), and the Government of Zambia. None of these orders exceeds 30 aircraft, which means the Iranian agreement would be the biggest international deal for the Sukhoi manufacturer.

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