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New Details Emerge About Iran-Boeing Deal

New Details Emerge About Iran-Boeing DealNew Details Emerge About Iran-Boeing Deal

Ever since Iran's Minister of Roads and Urban Development Abbas Akhoundi broke the news of a "written agreement" between Iranian flag carrier Iran Air and US planemaker Boeing, the media has been awash with complementary articles, including reactions from different parties concerned with the grand deal.

The latest of such news, published by Reuters, citing Tim Keating, Boeing's senior vice president of government operations, says a provisional deal calling for Boeing to supply a total of 109 aircraft to Iran includes small and large jetliners worth $20.37 billion at list prices, both sold directly and leased.

The deal, which is yet to be approved by both governments, includes 80 aircraft worth $17.58 billion to be sold directly by Boeing, including 34 wide-body jets: 15 each of the 777-300ER and 777-9 models and 4 of the 747-8. It also includes the direct sale of 46 narrow-body jets: 40 of the upcoming 737 MAX model and 6 of the current 737NG model.

Under the same provisional deal, Boeing will arrange for Iran Air to acquire a further 29 737NG aircraft through leases.

Deliveries of the purchased jets are scheduled to start in 2017 and run through 2025.

The breakdown offers a boost to two current models that have seen declines in production lately: the twin-engined 777-300ER and four-engined 747-8, the latest version of Boeing's jumbo.

"This will help, but not solve, 777/747 production gaps," Leeham aerospace analyst Scott Hamilton wrote on Twitter.

Airbus agreed earlier this year to supply 118 jets worth $27 billion. Both planemakers must get US export licenses due to key US components in both portfolios of jets.

US and European governments had indicated during nuclear talks that it was "key and essential" that Iran should be offered both US and European aircraft.

People close to the talks have said that due to that complex diplomatic backdrop, the two deals could stand or fall together: contrasting with the "winner-takes-all" mentality of traditional clashes between the world's largest planemakers.

The sale and lease of Boeing jetliners, if completed, would constitute the biggest American business transaction with Iran since the 1979 Islamic Revolution.

Iran's Foreign Minister Mohammad Javad Zarif said on Wednesday he hoped that Tehran's deal with Boeing would pave the way for finalizing the contract with Airbus.

"We thought to speed up our ties with Airbus, we should make a deal with Boeing first. Now we feel the situation is ripe for both," said Zarif in a meeting with the foreign affairs commission of the French Senate in Paris.

The Chicago-based manufacturer issued a statement to AP on Tuesday, confirming that it signed the agreement "under authorizations from the US government".

"Boeing will continue to follow the lead of the US government with regards to working with Iran's airlines, and any and all contracts with Iran's airlines will be contingent upon US government approval," it said.

Shortly after, the US State Department said it welcomes Boeing's announcement of a deal with Iran Air and that it involves the "type of permissible business activity envisioned" in the Iran nuclear deal.

"The State Department welcomes Boeing's announcement of this deal with Iran Air," State Department press secretary, John Kirby, was quoted by Washington DC-based newspaper The Hill as saying.

"Boeing has been in close contact with the State Department regarding this deal. The [Joint Comprehensive Plan of Action] provides an opening for civil aviation companies, including American companies, to pursue legitimate commerce with Iran and we note reports of progress in the aviation sector, which is good both—for both the economy and for public safety," he said.

 

Financialtribune.com