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 Dennis Muilenburg
 Dennis Muilenburg

Boeing Deal Making “Steady Progress”

Dennis Muilenburg says Boeing has already gone through the licensing process and that the company is working the financing structure

Boeing Deal Making “Steady Progress”

Boeing is making “steady progress” to complete the terms of an 80-jetliner sale to Iran Air and expects to deliver the initial planes next year, the first US aircraft exports to Iran since the Islamic Revolution in 1979.
“That remains on track,” Chief Executive Officer Dennis Muilenburg told reporters on Monday following the planemaker’s annual general meeting in Chicago, Bloomberg reported.
“It’s really important that at every step of the process, we’re working on this hand-in-hand with the US government.”
The $16.6 billion deal with Iran Air and a separate $3 billion agreement with Iran Aseman Airlines bring two of US President Donald Trump’s initiatives into conflict: his campaign vows to “get tough” on Iran and his promise to bolster US exports supporting thousands of manufacturing jobs.
Airbus, Boeing’s European rival, already has delivered the initial planes in a $19 billion sale struck last year after a nuclear accord with Iran lifted some international restrictions on trade with the country.
The prospect of renewed aircraft deliveries to the Islamic Republic continues to rankle conservatives in the US.
The US House voted last year to block financing for aircraft sales to the Iran, and Senator Marco Rubio and US Representative Peter Roskam, both Republicans, have called on Trump to intervene.
“Boeing’s deals with Iranian airlines seem incompatible” with the company’s mission of protecting American values, said David Almasi, vice president at the National Center for Public Research, a conservative think tank, said at the annual meeting.
The Iran Air transaction would provide a crucial sales boost for Boeing’s 777, as sales slow for long-range jetliners and customers wait for an upgraded model that is expected to enter the market in 2020.
Boeing has 124 unfilled orders for the current generation 777, the company’s largest twin-engine jet. The 15 aircraft ordered by Iran Air would give assurance that production runs smoothly in 2018 and 2019.
“We’ve gone through the licensing process,” Muilenburg said. The company is “working the financing structure”.
"If the Iran Air aircraft are added to the backlog, Boeing’s production would be 90% sold out for the next two years," he said.
That would lower the risk of a third production slowdown and of potential layoffs.
Muilenburg said the company has booked nine orders for the 777 this year and has additional sales campaigns underway, stressing that he's "bullish about the prospects for the 777”.
His comments came after Iran Air recently confirmed the cancellation of an earlier-than-expected delivery of a Boeing 777-300ER, following deputy minister of roads and urban development, Asghar Fakhrieh-Kashan's announcement last month that Boeing had offered the jet to Iran Air after Turkish Airlines canceled its order ahead of delivery.
Iran Air CEO Farhad Parvaresh was quoted by the Ministry of Roads and Urban Development’s news service as saying that his company had welcomed Boeing’s offer and that after performing technical and financial assessment it was close to receiving the plane, “but the plane was not available anymore”.
The canceled delivery would have cut short the long waiting period for Iran Air to receive its first Boeing jet.
Before the Iran Air CEO’s announcement, an aviation outlet, which is said to be associated with the United States’ Paine Field Airport, initially cited sources in both Boeing and Iran Air as saying that the deal was “dead” because “Turkish has decided to take the delivery of TC-LJK”.
Soon after, reports by certain local media close to opponents of the government of President Hassan Rouhani claimed that the delivery had been cancelled due to Iran Air’s inability to afford the payment of the first installment, amounting to $75 million.
Parvaresh dismissed the claim as unfounded.

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