Boeing confirms passing $20B Iran deal
Boeing confirmed the manufacturer would comply with US sanctions and will not fulfill the orders placed by Iran Air and Aseman Airlines. The two Iranian carriers hold an order of more than 110 aircraft for an estimated total of about $20 billion.
As it was previously declared soon after Trump’s decision to withdraw from the Iran deal, a spokesperson from Boeing confirmed the news to AFP. “We have not delivered any aircraft to Iran, and given we no longer have a license to sell to Iran at this time, we will not be delivering any aircraft,” the spokesman said. Despite contracts being among the biggest signed by a foreign airline, Boeing never recorded these orders in its backlog unlike rival Airbus, the spokesperson insisted.
After a preliminary agreement with Iran in 2015, the U.S. Treasure Department delivered specific licenses to both Boeing and Airbus in September 2016, allowing to sell commercial planes to Iran. Soon after, Iran airlines started ordering planes to renew their aging fleets. Indeed, several aircraft of Iran Air fleet are on the EU blacklist due to safety concerns, and those still allowed are regularly inspected when they land at European airports.
On December 11, 2016, Boeing agreed to sell 80 aircraft to Iran. This included 50 B737 and 30 B777. The delivery was to be made in the next 10 years, with the first planes landing in Iran in 2018.
The total contract of about $16.6 billion was expected to secure up to 100,000 jobs in the United States according to the New York Times. The U.S. based manufacturer also secured a $3 billion contract with Iranian company Aseman Airlines for thirty Boeing 737 MAXs that were to be delivered between 2022 and 2024.
Airbus will now have to give an answer as to whether or not it will follow Boeing and comply. The European manufacturer uses U.S.-made parts for its planes and even owns an assembly line for the American market in Mobile, Alabama. Thus, it could face sanctions from Washington.
On December 22, 2016, Airbus received a firm order from Iran Air for 100 aircraft: 46 A320, 38 A330 and 16 A350XWB. Two A330-200s and an A321 were already delivered in 2017. The total catalogue price was estimated at $10 billion maximum. Another order was placed on June 22, 2017, by Zagros Airlines for 28 aircraft including 20 A320neos and 8 A330neos. As for helicopters, Iran was in the process of acquiring 45 civilian models from Airbus for emergency medical use.
Iran will be forced to find other plane suppliers as the Transport Minister of the Islamic Republic, Abbas Akhoundi, estimated that 400 new planes will be needed in the next ten years, a huge market now closed to Western manufacturers. Russian Sukhoi could benefit from this opportunity: the manufacturer announced being in the process of modifying its Superjet-100, dropping the number of U.S.-made parts down to 10%. That way, it would not need approval from the U.S. Treasure in order to sell its planes to Iran.
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