Economy, Business And Markets

Air Transport Development Bank Proposed

Air Transport Development Bank ProposedAir Transport Development Bank Proposed

Iranian aviation officials are studying a plan to create a fund to provide loans enabling domestic businesses to purchase planes.

Maqsood As’adi-Samani, secretary of the Iranian Aviation and Space Industries Association, said on Tuesday a plan for the foundation of a bank specializing in financing aviation has been offered to the relevant authorities, Fars News Agency reported.

As’adi-Samani said the plan envisages the creation of a bank by the IASIA, stressing that the bank will redress the shortfalls in budgets of domestic companies for purchasing planes. The bank will secure loans for Iranian aviation companies renovating their aging air fleet by purchasing planes from foreigners.

He emphasized that this is a shortcoming that needs to be addressed by the banks and financial institutions “as is customary in other countries”.

“Iran’s aviation companies are unable to provide all the required funds to buy planes by relying on their current revenues,” said As’adi-Samani.    

The official further said the establishment of IASIA’s own bank–which he said could be named the Air Transport Development Bank of Iran–can eventually help with the renovation of Iran’s aviation fleet.

As’adi-Samani emphasized that the required funds for the proposed bank will be provided from the National Development Fund as well as related financial facilities.    

“The NDF previously provided funds to companies to buy planes through banks but required guarantees above the value of their assets,” he said. “But this problem has been resolved and the government can now accept planes as guarantees for the loans it pays the companies.”

Iranian officials announced last week that the country plans to place orders with aviation giants Boeing and Airbus to purchase up to 90 planes per year until 2020.

On Tuesday, deputy head of the Civil Aviation Organization of Iran (CAO) Mohammad Khodakarami, announced that the country plans to buy up to 90 Airbus and Boeing passenger planes per year to revamp its aging air fleet.

“Iran is tasked with adding 80 to 90 airplanes to the fleet each year until 300 new ones are in place to renew its timeworn fleet,” Khodakarami said.

Iran needs above 400 civilian aircraft worth at least $20 billion in the next decade to renovate its aging fleet.