Economy, Business And Markets

Boeing Moves Closer to Iran Dealing

Boeing Moves Closer to Iran Dealing
Boeing Moves Closer to Iran Dealing

The US government cleared the manufacturer to begin talking with approved Iranian carriers about their fleet needs, a first step toward entering the country’s resurgent aircraft market, Boeing said on Friday.

The planemaker will still need a separate license to complete any commercial jetliner sales, according to Bloomberg.

Europe’s Airbus Group SE, which faced fewer restrictions, grabbed an early lead with a $27 billion order announced on the day nuclear sanctions were eased last month. While European aerospace rivals began scoping out potential sales last year, Boeing was not allowed to veer beyond safety-related items such as the aircraft maintenance manuals it sold to Iran Air Tours.

Boeing had been a notable no-show as the country’s aviation market reopened, skipping a January aviation gathering in Tehran and causing Iran Air Chairman Farhad Parvaresh to suggest that the company was “lagging behind a bit”.

However, referring to the Iran Air's order for 118 Airbus, Parvaresh said: “We just signed a big agreement on that, but this doesn’t prevent us from also signing an agreement with Boeing on some of their products.” The remarks were made on the sidelines of an aviation conference in Tehran last week.

The flag carrier revealed its Airbus deal on the day sanctions imposed over Iran’s nuclear program were lifted, with President Hassan Rouhani confirming the order for 45 single-aisle A320s and 73 A330, A350 and A380 wide-bodies on a subsequent visit to Paris.

Just before the UN nuclear watchdog IAEA confirmed on January 16 that Iran had abided by its promise to limit the scope of its nuclear program, American media reported that US President Barack Obama took another step toward implementing the Iran nuclear deal, by ordering that a decade-long ban on sales of civilian aircraft to Iran be lifted.

The largest US planemaker Boeing, along with other western manufacturers, had been prohibited from doing any dealings with Iran as of the 1979 Islamic Revolution until November 2013, when an interim nuclear deal was reached between Iran and world powers.

On October 2014, Boeing confirmed it had sold aircraft-related goods to Iran Air. The Chicago-based Aerospace and Defense Company said in a public filing that it sold aircraft manuals, drawings, navigation charts and data to Iran Air to help improve the safety of Iran’s civil aviation industry.

However, sales of aircraft have so far remained banned.

Despite Airbus’s head start, there is still opportunity for Boeing to nab sales of its wide-body 777-300ER jets, said Rob Morris, head of aviation consultant Ascend Worldwide.

Boeing shares fell 2.1% to $115.16 at the close in New York. The stock has dropped 20% this year, the second-worst performance among the 30 members of the Dow Jones Industrial Average.

General Electric Company, the world’s largest maker of jet engines, has also applied to do business in Iran, said Rick Kennedy, a spokesman for the company’s aviation unit.

GE’s application was submitted in preparation for opportunities arising as the airframers open talks, Kennedy said.

GE Aviation, through its CFM International joint venture with France’s Safran SA, makes engines powering many aircraft, including Boeing’s 737 and models in Airbus’s A320 family.