Economy, Domestic Economy

Boeing Invited for Talks

Boeing Invited for TalksBoeing Invited for Talks

The government has invited US plane manufacturer Boeing to negotiate the purchase of passenger aircraft to renovate Iran’s aging fleet, said Iran's minister of roads and urban development.

“After US administration sent signals to Boeing regarding the removal of aviation sanctions, we have invited the company for talks,” Mehr News Agency also quoted Abbas Akhoundi as saying on Friday.

Boeing said last month that the US government cleared the manufacturer to begin talks with approved Iranian carriers about their fleet needs, a first step toward entering the country’s resurgent aircraft market.

Europe’s Airbus Group SE, which faced fewer restrictions, is way ahead of the American rival with a $27 billion order announced on the day nuclear sanctions were eased last month.

While European aerospace companies began scoping out potential sales last year, Boeing was not allowed to veer beyond safety-related items such as aircraft maintenance manuals it sold to Iran Air Tours.

Iranian officials, on several occasions, have warned the US plane giant that it is lagging behind.

“We never closed the doors to Boeing and we are ready for negotiations whenever they come,” deputy transport minister, Asghar Fakhrieh Kashan, has been quoted as saying by AFP.

Akhoundi did not mention the date of upcoming talks that would be one of the first economic results of the recent thaw between the United States and Iran since the July landmark nuclear deal between Tehran and the world powers.

The agreement, also known as the Joint Comprehensive Plan of Action, was implemented on Jan. 16, ending many sanctions on Iran in exchange for limitations on the country’s nuclear activities.

Reached for comment about Akhoundi’s statement by the New York Times, a spokesman for Boeing, John Dern, declined to specify whether those planning discussions had even begun, but he said “any engagement we have with the Iranians will be limited to the license”.

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

Fleet renovation has been on top of the government’s agenda ever since the July deal was reached.

According to Iran Civil Aviation Organization, the country needs 400 to 500 aircraft over the next decade to modernize the fleet.

Of the roughly 280 planes flown by more than a dozen airlines in Iran, including some aging Boeing 747s, many have been grounded because of mechanical and other issues, aviation industry analysts have said.

The average age of Iran’s commercial airplanes exceeds 20 years and many are considered dangerously outdated—partly a legacy of the western sanctions that severely limited Iran’s ability to replenish and maintain its civilian fleet.

While Boeing has lagged in the newly opened Iranian market, Iran’s interest in purchasing Boeing jetliners is well known. Iranian aviation officials have said they would like to purchase an equal number of Boeing and Airbus planes.

Kashan earlier said Iran wants Boeing 737s, one of the world’s most widely used jetliners.

Despite the engagement with Boeing, Iran largely remains off limits commercially to American businesses because many other sanctions unrelated to the nuclear accord remain in effect, most notably a wide-ranging embargo on direct trade in many goods and services. With some exceptions, American banks must avoid dealing with Iran.

The Airbus deal alone—for 73 long-haul and 45 medium-haul aircraft—is worth $10.5 billion, according to the transport minister. The planes, which are estimated to be valued between $25 billion and $27 billion at list prices, are to be delivered over the next eight years.