Economy, Business And Markets

Iran Set to Revamp Aviation Fleet, Facilities

Iran Set to Revamp Aviation Fleet, Facilities
Iran Set to Revamp Aviation Fleet, Facilities

By partnering with Airbus, Iran will offer “unparalleled” air transport services, says Iran Air Chairman and CEO Farhad Parvaresh.

The statement sums up the government’s new aviation targets. Iran wants to turn itself into a regional air transport hub ever since western sanctions, including those on its aviation industry, were lifted in mid-January. To reach that end, the first stop was Paris.

Soon after a two-day trip to Italy, as the first leg of a European tour, President Hassan Rouhani, his ministers and 120 businessmen on Thursday flew to France where they signed billions of dollars’ worth of deals with French businesses. The deals mostly concerned upgrading the domestic aviation sector battered by three decades of sanctions.

The government signed a preliminary deal worth $10.5 billion with French plane manufacturer Airbus, to buy 118 passenger planes via rent-to-own contracts which, according to Minister of Roads and Urban Development Abbas Akhoundi, will be delivered over the next eight years.

“The final contract will be signed within the next 20 days,” Mehr News Agency quoted the minister as saying in an interview with Iran’s state television late Saturday.

  Payment Schedule

Iran will put up $1.5 billion during the eight years, and the rest of the deal will be insured by Italian insurer Sace, which will find European banks to put up the rest of the money for buying the aircraft, according to the chief executive of Export Guarantee Fund of Iran, Seyyed Kamal Seyyedali.

ran will repay the loans it gets for buying the planes from the money made from increasing ticket sales, in a span of 15 to 20 years.

Sace’s role in the aircraft purchase agreement is part of a deal it signed with the Central Bank of Iran this year to finance parts of Iran’s economic expansion plans.

The Airbus accord covers 45 single-aisle planes comprising 21 from the current generation of A320 family and 24 re-engined A320neos. There are also 73 wide-body aircraft, including 27 A330s, 18 A330neos and 16 of Airbus’s latest A350s, plus 12 A380s.

Iran’s decision to buy the A380 is a significant boost for Airbus. The company has struggled to convince airlines to order the world’s biggest passenger aircraft in the past two years. Airbus only broke even on the A380 program last year, a decade after it first took to the air.

A380 is a double-deck, four-engine jet airliner with 525-853 seats and has a design range of 15,700 kilometers, sufficient to perform nonstop intercontinental flights. To accommodate the wide-body A380, Iran will also need to upgrade its airport facilities.

The A380 has a wider wingspan than the largest aircraft currently in use, the Boeing 747. This will require larger separations in taxiways and wider runways. The plane will be more demanding of apron and parking space. Terminals will also need to be adapted to handle it.

Since it is a double-deck aircraft, new double-deck air bridges will be required if turnaround times are to be kept near levels achieved with smaller aircraft. Within the terminals, larger gate holding areas will also be needed to handle the larger number of passengers.

Under another deal, Airbus has agreed to provide Iran with information regarding airport upgrades. According to the agreement, Airbus will support the modernization of Iran’s air traffic control services, airport operations and aircraft maintenance, and assist regulatory harmonization and technical and academic training of Iranian airmen.

During the France visit by President Rouhani, Iran also reached agreements with Aeroports de Paris and Bouygues SA to cooperate in the construction of a new terminal at Tehran’s main Imam Khomeini International Airport.

The Transport Ministry has plans to increase IKIA’s capacity to 45 million passengers per year.

French construction company Vinci SA also signed an outline agreement to run and renovate airports in Mashhad and Isfahan.

Rejuvenating Iran’s airports is a top priority for Iran as “only 10 out of 67 airports of the country are currently operating effectively”, Akhoundi said in a Saturday night interview.

Iran Airports Company is setting aside $250 million for procurement of state-of-the-art equipment and modern technologies for Iran’s airports, according to its deputy head, Saeed Akbari.

The government-affiliated holding company manages 54 airports.

  Plan to Buy From ATR

A deputy transport minister said at the weekend that the Iranian government also expects to finalize within days a deal to buy up to 40 planes from ATR, the European manufacturer of turboprop aircraft.

“We discussed the deals in Italy and France, and ATR officials are expected in Tehran in the coming days to complete the agreement,” Asghar Fakhrieh Kashan was quoted as saying by AFP.

“There will be 20 firm and 20 optional orders,” he added, without specifying the value of the contract.

ATR is co-owned by European aircraft manufacturer Airbus and Italian aerospace group Finmeccanica.