Economy, Domestic Economy

Boeing Still Stands Chance After Airbus Deal

Boeing Still Stands Chance After Airbus DealBoeing Still Stands Chance After Airbus Deal

Iran Air says it’s open to buying aircraft from Boeing even after ordering 118 jetliners worth $27 billion from competing planemaker Airbus, as soon as international sanctions were removed last month.

Boeing is “lagging behind a bit” and might have acted faster given that the US Treasury, which plays a key role in policing trade barriers, could have granted an export license via its Office of Foreign Asset Control, Iran Air Chief Executive Officer Farhad Parvaresh said on the sidelines of an international aviation summit in Tehran, Bloomberg reported.

“We always thought the 737 for the domestic market is a good option, but they have a rival with the A320,” Parvaresh said at an aviation conference in Tehran.

“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 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.

Boeing has made no announcement and was absent from a January aviation gathering in Tehran its European rival attended.

The two-day Tehran conference on Feb. 15-16 hosted representatives of 50 international companies as well as economic delegations from 15 countries, including Germany, France, Spain, Sweden, the United Kingdom and Belgium.

> Barriers Remain

To be sure, obstacles remain to American businesses doing business with Iran, with the US agreeing to remove curbs primarily for foreign players. While commercial aviation companies were the only entities granted special authorizations under the nuclear deal, the US retains discretion over sales by requiring them to file for a transaction-specific license.

Iran Air, which currently serves 27 domestic and 29 international routes, is likely to need more aircraft as it rolls out a 10-year plan aimed at moving from survival mode to expansion.

The company plans to tap a national market of 80 million people and the global Persian diaspora of about 10 million, as well as the anticipated influx in business visitors.

Parvaresh said Iran Air, whose aging fleet numbers about 40 planes, including Boeing 747s, A320s and discontinued A300s, A310s and Fokker NV 100s, is looking to add routes to markets such as Canada, Australia and Singapore once it gets the wide-bodies to make those flights.

It also wants to reinstate destinations such as Tokyo and Seoul that were halted under sanctions.

> Airport Ambitions

“For now, the 747 is not suitable, but if we get the A330 and A350 we can run those itineraries,” he said. “We need the planes, but the potential is there.”

Iran Air aims to eventually list on Tehran Stock Exchange, though must be in a “suitable condition” first and has set no timescale, Parvaresh said.

The modernization of Iran’s aviation industry also requires the purchase of 160 regional aircraft and the upgrade of dozens of airports, Iran Civil Aviation Organization CEO Ali Abedzadeh said in an interview at the conference.

"About 20 of 80 bases are inoperative and standards generally must improve," he said.

Abedzadeh said Iran has ambitions to establish Imam Khomeini International Airport as a regional hub and is in talks with France’s Bouygues SA and Aeroports de Paris on initial spending of $2.5 billion.

"Tehran’s secondary Mehrabad base and terminals in Mashhad, Isfahan and Tabriz are also a priority," he said.