Economy, Domestic Economy

Foreign Investors Can Own Up to 49% Shares of Airlines

Foreign Investors Can Own Up to 49% Shares of AirlinesForeign Investors Can Own Up to 49% Shares of Airlines

Foreign airlines are increasingly showing interest in Iran’s aviation sector, according to deputy head and caretaker of Iran’s Civil Aviation Organization, Mohammad Khodakarami.

“According to Iran’s laws, foreign investors are allowed to own up to 49% shares of airline companies, while the remaining 51% will continue to be owned by their Iranian partners,” he added.

According to the official, a number of international aircraft manufacturers have offered proposals for sale of aircraft, airport equipment and navigational aids, IRNA reported.

He, however, noted that domestic airlines are tight in budget as the sector needs about $1.5 billion annually for air fleet renovation and purchasing spare parts.

“Obtaining the required financial resources, through government support or other means of financing, will enable domestic airlines to acquire new aircraft through procurement, rent, or rent-to-own systems,” he said.

In addition to foreign proposals for establishing airline offices and sales of aircraft, requests for establishing new flights to Iran are also on the rise. Reports show a surge in international demand for flights to Iran after the country reached a nuclear deal with major world powers on July 14.

According to a research by the global travel search engine, Skyscanner, worldwide search for flights to Iran grew by nearly 30% between June 26 and July 5 over the preceding 10-day period.

“Currently, three flights are conducted between Iran and France every week. We are planning to increase this number to 10, through domestic and international airlines,” said Khodakarami.

The CAO is also planning to hold correspondence with other European countries like Germany and Italy to increase the number of flights to these countries. Iran currently has 14 weekly flights to Germany and 4 to Italy which according to the CAO official are not enough to meet rapidly growing demand.

Khodakarami also talked of plans to establish new flights to Denmark, Australia, the Persian Gulf states and other neighboring countries which have been showing more interest in traveling to Iran.

Furthermore, CAO is planning to increase the number of flights to Turkey to 100 from the current 70 flights per week. Flights to Russia are also set to increase four-fold to 28 from the current 7 weekly flights, according to Khodakarami.

Currently, about two thirds of Iran’s international flights are conducted by domestic airlines. CAO is hoping to increase this share by establishing new international flight routes.