Domestic Economy

More Than Just a Plane

The jet delivery comes days before the anniversary of the implementation of Iran’s landmark nuclear deal with the world powers on January 16, 2016
The new Airbus A321 painted in Iran Air livery in Hamburg, Germany
The new Airbus A321 painted in Iran Air livery in Hamburg, Germany

An Airbus A321 is due to land in Tehran’s Mehrabad International Airport today at 2:30 p.m. local time, which marks the first delivery from the 100 jetliners state carrier Iran Air ordered from the French planemaker in January last year.

Iran Air Spokesman Shahrokh Noushabadi said on Wednesday the plane was expected to fly to Airbus headquarters in Toulouse, France, after final technical tests were carried out in Hamburg, Germany, where the jet was assembled, IRNA reported.

The delivery comes days before the anniversary of the implementation of Iran’s landmark nuclear deal with the world powers on January 16, 2016, when the US, EU and the UN lifted sanctions against Iran. In exchange, Iran agreed to scale back its nuclear program.

Soon after the deal’s implementation, President Hassan Rouhani travelled to France where Iran Air CEO Farhad Parvaresh signed a draft agreement for the historic order from Airbus. The deal was finalized on December 22, after almost a year of shuttling between Airbus and Tehran.

The airbus deal, including 46 of the narrow-body A320 family that includes the A321 model, 38 long-haul A330s and 16 of Europe's newest long-range model, the A350, has an estimated catalogue value of $18-20 million, though Iran says it is paying no more than $10 billion to Airbus.

Although the first jets use an Airbus backdrop financing, Iran says it has reached agreements with major financiers in Persian Gulf states and China to finance the rest of the planes.

It is widely believed that once the Airbus deal makes progress, it will pave the way for major companies and large financial institutions to start doing business with Iran.

> Airbus Officially Books Iran Order

Airbus has placed the Iran order in the list of its firm deals.

Reuters said on Wednesday the French company has officially booked a deal to sell 98 aircraft to Iran Air, part of a surge in new orders at the end of last year.

The European planemaker said it won 731 net aircraft orders in 2016, including 321 in December alone. This allowed it to beat American planemaker Boeing in the race for new orders.

Iran Air has also placed a deal with the American company to purchase 80 aircraft worth $17 billion.

Both companies have received permits from the US Treasury Department to sell jets to Iran. However, the deals are expected to go through, despite the potential opposition of the incoming US President Donald Trump, which has been a staunch critique the nuclear deal. Trump has prioritized job generation.

The Airbus deal’s success is also expected to sharpen efforts by Boeing to persuade the Trump administration to allow the trade to go ahead, aviation experts believe.

The two planes manufacturers are arch-rivals. Nonetheless, their dealings with Iran go hand in hand, as each is contingent on continued US clearances for the sale of planes built with US parts.

Boeing needs a powerful lobby to push against efforts by Republicans belonging to the Israeli lobby in the US House of Representatives, who have pledged to cancel the deals at any point.

On the domestic front, President Rouhani is banking on the first deliveries to show tangible results of the nuclear deal, also known as Joint Comprehensive Plan of Action, which in turn would help him secure a reelection in the next presidential elections in May.

Iran expects the delivery of a total of eight Airbus planes, including one A321 narrow-body and two long-range A330s, along with ATR planes before March 20.

Local media have heartily welcomed the upcoming delivery of the new plane. The Persian newspaper Shargh wrote on Wednesday: “The delivery will in effect end 40 years of sanctions against Iran."

Another Iranian newspaper Etemad wrote: "It seems like Iranian aviation authorities have kept their word. Now we can be more optimistic about their promises in the future."

Iran is in dire need of the new planes to rejuvenate its dilapidated air fleet of about 250 planes. But the new delivery’s symbolic value outweighs its technical one.

Despite isolation, the Islamic Republic has operated and maintained its aging fleet for four decades. In 2016, Kish Airlines received three secondhand Airbus planes to help reduce its fleet age.

Today, Iranian officials have planned a ceremony in Mehrabad Airport to receive the newly purchased plane painted in Iran Air livery and carrying the Iranian flag, to show off the first tangible benefit of the nuclear deal.

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