Economy, Domestic Economy

Talks Continue With Big Planemakers

The CAPA Iran Aviation Finance Summit opened at Tehran’s Imam Khomeini International Airport on Sept. 18.The CAPA Iran Aviation Finance Summit opened at Tehran’s Imam Khomeini International Airport on Sept. 18.
Iran estimates it will need at least 400 aircraft to renew and expand its fleet

Iran has been told that the United States will issue export licenses within weeks to facilitate the purchase of Boeing and Airbus jets and European ATR turboprop planes, a senior Iranian official said on Sunday.

“Approval had been expected by the end of August, but that has been pushed back to the end of September,” Reuters quoted deputy roads and urban development minister, Asghar Fakhrieh Kashan, as saying.

“Today we are expecting that (approval) by the end of September for Boeing, Airbus and ATR,” he told the CAPA (Center for Asia-Pacific Aviation) Iran Aviation Finance Summit in Tehran, which opened on Sunday.

The US Treasury can veto sales of modern aircraft to Iran, including non-US ones, due to the high proportion of US parts.

Kashan said failure to issue the required US approval would breach an agreement between Tehran and world powers to ease sanctions in return for curbs on Iran’s nuclear activities.

An Iran Air official said the airline is looking to acquire secondhand aircraft or hire crewed aircraft to help meet its most urgent needs.

Iran provisionally agreed earlier this year to buy over 200 jets worth $50 billion at list prices from Airbus and Boeing. Both deals hinge on the longer-than-expected process of winning US Treasury approval.

There have also been delays in getting European banks to finance the deals because of restrictions over the use of US dollars.

Roads and Urban Development Minister Abbas Akhoundi told the Tehran conference that Iran was complying with its obligations and continues to negotiate with other planemakers.

“We are negotiating with all those big names ... There are a lot of obstacles but I am sure that because we have respected all the international rules and regulations, all those problems are going to be resolved,” he said.

“We have a contract. We will stick to it,” the Iranian minister told in an interview with Reuters, referring to the preliminary deals with Boeing and Airbus.

He also said the CAPA Summit–the second largest gathering of aviation leaders in Tehran since sanctions were lifted in January–proved that aviation was international in scope and “the US government cannot stand against it”.

The House of Representatives in July passed two amendments that would stop the aircraft sales, although to become law they need to be approved by the Senate and signed by President Barack Obama.

Iran estimates it will need at least 400 aircraft to renew and expand its fleet, including some 250 in the next 10 years.

Besides the aircraft sales, Iran is dangling the prospect of significant business for western companies, including nationwide airport expansion as it emerges from decades of sanctions.

“There are more than 60 airports in Iran but 80% of flights are in just 10 and these are working beyond capacity; that is why we need to develop,” Akhoundi said.

“They are all ready to attract investors who are welcome to invest in any part,” he told the conference held at Tehran’s Imam Khomeini airport, which plans a $2.8 billion expansion.

Iranian officials alongside 150 officials and business executives from Britain, France, Germany, the Netherlands, Brazil, Canada and China among others are participating in the two-day CAPA Iran summit.

According to an announcement posted on CAPA’s website, the event has been organized with the aim of providing a forum to identify financing solutions for transactions related to Iran’s aircraft acquisition, leasing and the development of airport and airspace infrastructure.

CAPA held its first international aviation summit in Iran after almost 40 years back on January 24 and 25.