Economy, Domestic Economy

Tehran Returns as Business Destination

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British Airways CEO Alex Cruz
British Airways CEO Alex Cruz

At the CAPA Iran Aviation Finance Summit at Tehran’s Imam Khomeini International Airport where Minister for Roads and Urban Development Abbas Akhoundi announced that the government would invest over $2.5 billion to develop the site into a new “airport city”, several large-scale investors and stakeholders discussed their plans for playing a part in the development of the airport.

On the sidelines of the summit, Financial Tribune talked with the British Airways CEO Alex Cruz about his plans for the future of the airport and his airline.

Cruz said with 300 planes under the BA banner, plus others from partner companies like Aer Lingus of Ireland and Iberia of Spain, Iran holds a lot of potential for the IAG holding group.

“The main reason why we are here is because of the new flights; not ‘new’ because we are returning to Iran with British Airways,” Cruz said.

He said they are now flying once a day, except Sundays with a Boeing 777 Aircraft, “but we will soon add Sunday to our flights again”. He also said Tehran was a missing destination in their flight plan before the September 1 resumption and that it was an uncomfortable period with no flights directly to the Islamic Republic for the company.

Cruz said initial reservations for his airline were better than what he was expecting.

During the CAPA Summit, UK’s trade envoy to Iran, Norman Lamont, announced that the British government and UK Trade and Investment would invest time and resources to help develop Iran’s aeronautical infrastructure.

However, that investment may only be forthcoming from the government bodies and not the private sector, as Cruz said BA and the International Consolidated Airlines Group, which is a British-Spanish multinational airline holding company based in London, would not be part of any current development deal.

The BA chief added that direct flights to British and other Iranian cities are not on the cards currently.

When it comes to high-paying passengers, Cruz said that the future growth of his business relies not only on returning Iranians but also foreign and expatriate business people looking to do business, while also admitting: “There is potential for growth.”

One issue business travelers complain about British Airways flying to Iran is that they have not signed an agreement with the Business terminal.

“We cannot commit and we’re not immediately considering it, but would hopefully offer it for Club World and First Class passengers in the next few months,” Cruz said.

The CEO said the obstacles facing Iranian aviation “are going to go away”. Passengers, tourism agencies and companies are going to “force us to cooperate” and there is determination and enthusiasm to develop these relationships.

Cruz noted that Iran “has the product” to stimulate a tremendous amount of traffic, both domestic and international, adding that there are shared “pains”-regulatory, technology and economic–between Iranian and UK airlines, but that passengers and partners are going to demand that these are settled.