Domestic Economy

Boeing Mission to Visit Tehran for Talks

Boeing Mission to Visit Tehran for Talks
Boeing Mission to Visit Tehran for Talks

A delegation of representatives of the US plane manufacturer Boeing will visit Tehran next week to discuss future cooperation, flag-carrier Iran Air reported on its website late Friday.

In Iran, weekdays start on Saturday.

During the visit, the Boeing mission will discuss “the feasibility of supporting the current fleet of Iranian carriers” with Iran Air executives as well as several private Iranian airlines, according to the report.

Minister of Roads and Urban Development Abbas Akhoundi said last month that the government had officially invited the US planemaker for talks, “after the US administration sent signals to Boeing regarding the removal of aviation sanctions”.

Boeing said in February that the US government allowed the manufacturer to begin talks with approved Iranian carriers about their fleet needs. The planemaker has yet to acquire a separate license to complete any sales of commercial jetliners.

Last month, John Dern, a spokesman for Boeing, declined to specify whether any discussions had begun, but said “any engagement we have with the Iranians will be limited to the license”.

Although Iran Air’s statement remains cautious in mentioning sales of Boeing jets to Iran, deputy transport minister, Asghar Fakhrieh Kashan, said acquisition methods and financial issues will be put up for discussion during the mission’s Iran stay.

“Talks will concern acquisition of planes in the form of hire-purchase and through a finance contract,” the Persian daily Forsat-e-Emrooz quoted Fakhrieh as saying.

Bound by a tight budget, the government has turned to international financing methods for buying planes.

Such methods were used in a recent deal between Iran Air and Airbus for the acquisition of 118 passenger planes—including 73 long-haul and 45 medium-haul aircraft, valued at $10.5 billion, according to the transport minister.

The planes, which are estimated to be valued at $25-27 billion at list prices, are to be delivered over the next eight years.

The Airbus deal, sealed during President Hassan Rouhani’s late-January visit to Europe, put Airbus way ahead of the American rival.

Fakhrieh said the deal will be finalized within the next two months.

Moreover, Ali Abedzadeh, the head of Iran Civil Aviation Organization, was quoted as saying by IRNA on Saturday that "Boeing has provided Iranian companies with technical support to upgrade flight safety". He did not elaborate.

Abedzadeh also said Iran has "good offers" from airplane manufacturers in Brazil, Canada and Japan for both leasing and selling airplanes to Iran.

While many aerospace companies began scoping out potential sales to Iran last year, Boeing was not allowed to veer beyond safety-related items such as aircraft maintenance manuals it sold to Iran Air Tours.

Boeing has been repeatedly warned by American experts that it has been lagging behind in doing business with Iran, especially after the country's deal with arch-rival Airbus.  

“We never closed the doors to Boeing and we are ready for negotiations whenever they come,” Fakhrieh has been quoted as saying by AFP.

The upcoming talks in Tehran comes after the July nuclear deal between Iran and world powers, and its ensuing implementation in mid-January, paving the way for Iran's reentry into global commerce.

Air fleet renovation tops the government’s agenda ever since the nuclear deal.

According to Iran Civil Aviation Organization, the country needs 400 to 500 aircraft over the next decade to modernize the fleet.

Of the roughly 280 planes flown by more than a dozen airlines in Iran, including some aging Boeing 747s, many have been grounded because of mechanical and other issues, aviation industry analysts have said.

The average age of Iran’s commercial airplanes exceeds 20 years and many are considered dangerously outdated—mainly as a result of western sanctions that severely limited Iran’s ability to replenish and maintain its civilian fleet.

While Boeing has lagged behind in the newly-opened Iranian market, Iran has repeatedly hinted that it is interested in making deals with the US planemaker. Iranian aviation officials have said they would like to purchase an equal number of Boeing and Airbus planes.

Fakhrieh says Iran is interested in Boeing 737s, one of the world’s most widely used jetliners.

Despite the engagement with Boeing, Iran largely remains off limits commercially to American businesses because many other sanctions unrelated to Tehran's nuclear program remain in effect, most notably a wide-ranging embargo on direct trade in many goods and services.

With some exceptions, American banks are still being made to avoid dealings with Iran.

However, Iranian airlines have been proceeding with new purchases. Iran’s Kish Air—operating in southern tourism and commercial hub of Kish Island—recently had its two secondhand Airbus planes delivered.

According to Abedzadeh, 16 new passenger jetliners will enter Iran’s fleet by the end of 2017.

As for any future purchase of Boeing airplanes, considering the murky climate surrounding the US regulations about dealings with Iran, and the general fear of US companies that they may be violating the still-in-place sanctions regime, the details of the developments regarding the ongoing negotiations are expected to remain undisclosed.

It remains to be seen when the American planemaker will be able to fly its way through the barriers and clinch a deal with the Islamic Republic.