Economy, Business And Markets

Airbus Poised to Reenter Iran’s Aircraft Market

Airbus Poised to Reenter  Iran’s Aircraft MarketAirbus Poised to Reenter  Iran’s Aircraft Market

Airbus is poised to reenter the Iranian passenger jet market, as western sanctions begin to roll back.

Fabrice Bregier, head of Airbus’s passenger jet unit, said the company had an understanding of future aircraft needs from Iranian airlines and officials, thanks to its business of supplying parts and safety services.

“We have made some contacts, yes,” he said in an interview with the Financial Times. “This is potentially a huge market for Airbus and our competitors.”

However, he stressed that commercial discussions had not yet begun, as western companies are banned from such talks until a landmark nuclear agreement between big powers and Iran is implemented. This is expected in the next few days, paving the way to a lifting of Iranian sanctions.

“We are dependent on the resolution of the international negotiations,” said Bregier. “[After that] we would have no reason not to consider Iranian airlines as a normal customer like the rest of the world. We are very strict at applying all the international rules and regulations.”

Bregier noted that Airbus and Boeing have been allowed under the existing sanctions regime to provide spare parts and safety manuals to Iran’s aging fleet, which was on average 25 years old.

“We have contacts to support this fleet and we try to understand better what would be the requirements of these customers in the future,” he added.

Boeing is understood to be equally keen to tap into what promises to be a lucrative aircraft market. But it is not yet clear if Iran with its cash-strapped economy and highly indebted domestic airlines will be able to buy up to 400 aircraft that the country has said it needs to renovate its fleet.

Abbas Akhoundi, Iran’s minister of roads and urban development, said in November that the country could not afford an estimated cost of $50 billion for new aircraft, which might make leasing jets a more reasonable proposition.

Iran’s civil aviation industry has been subject to sanctions since the 1990s, when Washington blocked Tehran from buying passenger jets, most spare parts or maintenance contracts.

“Airbus is keen to enter Iran’s market immediately after sanctions are lifted,” said an Iranian businessman. “It will take some time for Boeing, which is also keen, but needs to first resolve its problems with financing and continuation of the US sanctions.”

France has been keen to tap into the Iranian market and led a big business delegation to Tehran last year. Companies such as PSA Peugeot Citroen, Total and Renault have publicly voiced ambitions to return to Iran.