Iran's Deal With Bombardier Nears Conclusion

Canadian planemaker Bombardier has submitted a draft contract for 10 brand-new CRJ-900 NextGen regional jets to Iran’s Qeshm Free Area Organization for review and finalization, Reza Baqerinejad, the CEO and Chairman of Qeshm Investment and Development Company told the Financial Tribune on Monday, noting that the final contract will be officially unveiled within a month.

“The planemaker has obtained the sales license from the US Treasury’s Office for Foreign Assets Control and is ready to finance 80% of the order. The remaining 20% would be funded by Qeshm Free Area,” he said without providing further details about the total value of the contract.

The contract with Qeshm Free Area marks Bombardier’s first foray into the Iranian market as no Iranian airline has ever operated planes manufactured by the Canadian company.

Deliveries are expected to begin ten months after the deal is unveiled, Baqerinejad said. “Bombardier is expected to deliver two planes every three months.”

The order is part of the organization’s plan to launch a new airline called ‘Fly Qeshm’ to promote tourism is the southern Qeshm Island.

Fly Qeshm, which Baqerinejad calls "Iran’s first smart airline", has already received required permissions from Iran aviation authorities.

The official believes using the modern CRJ-900 NextGen aircraft would allow the airline to offer services that are completely different from other Iranian airlines.

Bombardier’s deal with Fly Qeshm is not limited to purchasing regional jets, as “the contract includes maintenance and repair services, training and parts.”

The contract makes Bombardier the fourth planemaker that has granted permission from the US Treasury to sell aircraft to Iranian airlines, at a time when US President Donald Trump’s hostile approach toward the 2016 nuclear agreement has been raising concerns about the fate of aircraft orders.

Boeing, Airbus and ATR have been given the go-ahead with their contracts with Iran Air. The flag carrier has so far received 11 planes, 3 Airbus jets in addition to 8 ATR turboprops.

Meanwhile, Iran Aseman Airlines' contract with Boeing to purchase 30+30 Boeing 737max jets is still pending OFAC licenses.