Economy, Domestic Economy

US Plane Permits Expedite Iran’s Global Economic Reintegration

Saeed LeylazSaeed Leylaz

The US license allowing Airbus and Boeing to sell planes to Iran will definitely send positive signals to investors and firms willing to enter the Iranian market, a prominent Iranian economist said.

Saeed Leylaz added that as Boeing is one of the largest US economic enterprises interacting with various sectors of the American economy, many US businesses will be involved in doing business with Iran, the Ministry of Roads and Urban Development’s news portal reported.

US plane manufacturer Boeing and its French rival Airbus finally won the US government’s permission to sell planes to Iran this month. The breakthrough came after Iran signed a deal with world powers last year, paving the way for the removal of sanctions against its economy in exchange for limiting the scope of the domestic nuclear program.

Many experts believe that not only will the new plane purchases help Iran renovate its dilapidated passenger air fleet battered by years of sanctions, but will also help speed up Iran’s reengagement with world economy, including that of the US.

Despite the lifting of nuclear sanction, many businesses, investors and major European banks remain wary of resuming business with Iran, for fear of running afoul of remaining US sanctions not related to Tehran’s nuclear program.

This is expected to change for the better after Washington’s green light to two of the world’s biggest planemakers.

Boeing won US approval to sell its first jetliners to Iran in almost 40 years. If finalized, this will be the biggest business transaction between the two nations since the 1979 Islamic Revolution.

Airbus won approval to export the first 17 jets in a $27 billion transaction announced in January as restrictions were eased.

Boeing is still finalizing terms to provide as many as 109 jets to Iran Air.

  Building Bridges

“It removes some uncertainty,” Bloomberg quoted Howard Rubel, an analyst at New York-based global investment bank and institutional securities firm Jefferies, as saying about Boeing’s license.

“It says that commerce is important and commerce builds bridges. It is also a pathfinder for other people that may want to do business with Iran over time.”

Boeing’s last airplane deliveries to Iran consisted of 747 jumbos that arrived in 1977, two years before the revolution, according to the company’s website. The Islamic Republic’s flag carrier would add more of the humpbacked 747s, as well as 777 and upgraded 777X wide-body jets under a $17.6 billion order for 80 Boeing aircraft. The US manufacturer is also helping Iran Air line up another 29 planes from leasing companies.

But long before the first newly purchased Boeing airliner lands at Imam Khomeini International Airport, Iran and the United States will have had to come to terms with a new reality: American citizens will once again be taking up residence in Tehran, the first to do so since the revolution, The New York Times wrote in an article after the licenses were issued by the US Treasury Department’s Office of Foreign Assets Control.

The aircraft sales will have the important effect of ending an era of absolute alienation between the countries. Boeing will almost certainly have to open an administrative office in Tehran and technicians will have to move here to train their Iranian counterparts in the care and maintenance of the planes. Among them, almost certainly, will be many Americans.

Word of the Boeing and Airbus deals came as President Hassan Rouhani was attending the United Nations General Assembly in New York. Speaking at a news conference on the sidelines of the event, he said Iranian officials already had developed relationships with counterparts at both aviation companies through “many visits”, and that Iran welcomed foreign businesses and investments.

“I do not see any problems,” he told reporters. “It is the United States government that is responsible for keeping American companies from the Iranian market. If Americans have problems, they need to resolve their own problems.”

Buying planes from the United States, opening a Boeing office or having American representatives at an international airport might seem insignificant. But they represent a tectonic shift in relations.