Boeing Deal at Half Price

Iran said on Sunday it had negotiated to pay only about half the announced price for 80 new Boeing airliners in an order that the American planemaker had said was worth $16.6 billion.

Boeing and its European rival Airbus have both signed huge contracts this month to supply airliners to Iran, the first such deals since international sanctions were lifted against the country over its nuclear program.

Despite Iran's considerable need for new planes to replace those from the sanctions era, it has entered the market at a time when Boeing, Airbus and smaller planemakers have all faced a downturn in orders, and are therefore expected to offer deep discounts.

Boeing said this month it was cutting production of its 777 long-haul jet due to a drop in demand.

"Boeing has announced that its Iran Air contract is worth $16.6 billion. However, considering the nature of our order and its choice possibilities, the purchase contract for 80 Boeing aircraft is worth about 50% of that amount," said deputy minister of Roads and Urban Development, Asghar Fakhrieh-Kashan, Reuters quoted IRNA as reporting.

Airbus's contract to sell 100 jets to Iran Air, signed on Thursday, would be worth $18-20 billion at list prices, but the head of Iran Air has been quoted as saying the value of the contract would not exceed $10 billion.

Fakhrieh-Kashan also said on Sunday that Iran Air may exercise an option to buy 20 more aircraft from ATR, a European maker of regional turboprops, in addition to a planned firm order of 20.

A team from the planemaker would arrive in Tehran on Wednesday for final talks.

"The final round of talks will be held with ATR representatives (next) week and we expect the Iran Air contract to be signed ... in the following week. The purchase of 20 planes has been finalized and Iran may buy 20 more planes," said Fakhrieh-Kashan, adding that the contract for 20 planes was worth less than $500 million.

In February, ATR, co-owned by Airbus and Italy's Finmeccanica, reported preliminary orders from Iran for 20 ATR 72-600 aircraft and options for another 20.

The deputy minister added that Iran Air will receive eight new Airbus and ATR planes by the end of the current Iranian year (March 20, 2017).

“By the yearend, Airbus will deliver an A320 and two long-range A330 planes to Iran Air,” he said.

The Airbus contract signed on Thursday for selling 100 jets to Iran Air includes 46 of the narrow-body A320s and A321s, 38 long-haul A330s and 16 of Europe's newest long-range model, the A350. The first jet, an Airbus A321 already painted in Iran Air livery, may arrive before the January 20, sources say.

The Boeing deal signed a few days earlier on 80 jets includes 50 of Boeing’s narrow-body 737max 8s, 15 wide-body 777-300ERs and 15 777-9s, which will be delivered to Iran Air over 10 years.