Economy, Domestic Economy

Iran Air to Receive First Boeing 777-300ER Within a Month

A picture of a Boeing 777-300 painted in Turkish Airlines livery circulated on the Internet purporting to be the aircraft Iran Air is about to receive (Photo @jenschuld Instagram) A picture of a Boeing 777-300 painted in Turkish Airlines livery circulated on the Internet purporting to be the aircraft Iran Air is about to receive (Photo @jenschuld Instagram)

The first passenger jet Iran has ordered from American planemaker Boeing will join Iran’s air fleet within a month, Deputy Roads and Urban Development Minister Asghar Fakhrieh-Kashan said.

After lengthy negotiations following the nuclear deal Iran clinched in 2015 with world powers, Boeing secured a contract in December with Iran Air for the sale of 80 planes—the first such transaction in decades.

"If the plane's options agree with the needs and preferences of Iran Air, it will be delivered within a month; in case we require additional options in the plane's interior such as the galley or the number of seats, the delivery will be postponed by another month," the deputy minister was quoted as saying by Mehr News Agency. 

Fakhrieh-Kashan noted that the aforementioned Boeing plane was initially ordered by Turkish Airlines that later cancelled the order. 

Under Boeing's agreement with Iran's flag carrier, the American planemaker had committed to delivering the first plane by 2018.

"After Turkish Airlines cancelled the purchase, Boeing suggested it can deliver the plane to Iran sooner than the first official delivery," the deputy minister explained, adding that Iran Air is currently studying the plane’s specifications and that the airline will opt to receive the jet if it is compatible with Iran’s climatic conditions as well as its technical needs.

“It is very strange that Turkish Airlines would cancel an order so late in the build process when they had already paid millions in pre-delivery payments and this comes just days after the airline accepted the delivery of a new, lease Airbus A330 from Intrepid Aviation,” Saj Ahmad, chief analyst at StrategicAero Research, told Financial Tribune.

He added that the cancellation of the Turkish 777-300ER raises more questions than it answers.

“The airplane may be put into long-term storage if Iran Air cannot arrange financing; Boeing will have little trouble selling this airplane to someone like Emirates or another leasing giant and is thus not obliged to ‘hold’ it for Iran Air,” he said.

Iran Air has received three planes it ordered from Airbus based on an agreement concluded in tandem with the Boeing deal. All the deliveries have been cancelled orders so far.

“It’s not surprising that airlines cancel orders. The terms are usually confidential so no two cancellations will be the same. It’s also difficult to say how many more possible cancellations are in the pipeline since even deferrals or airplanes are at record lows,” he said.

The Boeing deal is worth $16.6 billion based on list prices, but Iran is expected to pay half this price.

The order includes 50 of Boeing’s narrow-body 737max 8s, 15 wide-body 777-300ERs and 15 777-9s, which will be delivered to Iran Air over 10 years.

It is still unclear how the deal will be financed, as big banks and major financial institutions are still hesitant to engage with Tehran despite the removal of nuclear sanction against Iran.

Both Airbus and Boeing have received licenses from the US Treasury Department’s Office of Foreign Assets Control to sell aircraft to Iran Air. Airbus has agreed to sell a total of 100 planes to the flag carrier.

Earlier, Boeing signed a memorandum of agreement with Iran Aseman Airlines to supply 30 B737-Max passenger jets worth $3 billion based on catalogue prices with the option of adding 30 more in the future.

Aseman expects to finalize a contract in three to four months. Boeing has confirmed the deal in a statement, saying the deliveries would be scheduled to start in 2022.

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