Boeing, Airbus Set to Reap $20 Billion Orders from Iran

Reuters14.07.2015 Aviation & Space
Boeing, Airbus Set to Reap $20 Billion Orders from Iran

Boeing, Airbus Set to Reap $20 Billion Orders from Iran

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Western plane makers look set to reap billions of dollars in deals with Iran, if a deal is done on its nuclear program to allow one of the world's most promising aviation markets to come out of quarantine, said experts.

Iran and six world powers are struggling to remove the last obstacles to a historic deal in Vienna that could resolve a more than 12-year dispute over Tehran's nuclear ambitions.
For Tehran, the prospect of sweeping economic sanctions and a long-standing U.S. trade embargo being lifted represents a chance to renew a fleet whose average age of 23 years is almost twice the international average, and to do so at affordable prices, after years of paying over the odds on the black market.

For Airbus, Boeing and other manufacturers, that could mean up to $20 billion in deals, shaped in part by the negotiating positions of various camps during the lengthy nuclear talks. And for Iran Air's 38-year-old Boeing 747SP, the last of its kind, it should mean well-deserved retirement.

“There are a lot of aircraft that are really at the end of their lives. Iran is going to be a very hot market as and when sanctions are lifted,” said Maximo Gainza, senior consultant at UK-based fleet watcher Ascend Flightglobal.

The Chairman of Iran Air, Farhad Parvaresh, told Reuters last year that, as soon as sanctions were eased, Iran would seek to obtain at least 100 wide-body and short-haul jets, but that it would turn to Russia and China if nuclear talks collapsed.

Iranian and Western industry officials estimate that Iran, a country of 80 million people, will need a total of 400 aircraft in the next decade, suggesting there will be business for both major Western suppliers due to the long waiting times.

Officials cite a broad potential shopping list, from the latest Boeing 787 and Airbus A350 lightweight jets to workhorses such as the Boeing 737 and 777 or the Airbus A320 and A330 and even the most recent version of the jumbo, the Boeing 747-8, still in production but with declining sales.

Boeing appears best placed to take advantage of the first wave of sales, partly because France, which is home to Airbus and owns 11 percent of the firm, took a particularly hardline with Iran in the nuclear talks, according to industry sources, diplomats and people familiar with Iranian thinking.

Paris has become more hawkish toward Tehran in recent years as France aligns itself with Shi'ite Iran's Sunni rivals across the Gulf, Qatar and Saudi Arabia.

“The position of the French, particularly Foreign Minister Laurent Fabius, has not made things easy for Airbus,” said a European aviation industry source.

Iran's Transport Minister last month warned France it risked missing out on $80 billion worth of business unless it changed its stance towards Tehran.

Boeing said in October it had sold aircraft manuals, drawings, charts and data to Iran Air in its first acknowledged dealings since the 1979 hostage crisis that wrecked US-Iranian relations and triggered a U.S. boycott.

Airbus said it had applied for export licenses under the scheme for temporary sanctions relief that allowed the sale of some aircraft parts, but declined to say whether any goods or services had actually been provided.

In the long term, Iran has strategic ambitions to rival Gulf cities as a hub attracting traffic from Western Europe and North America to the Asia-Pacific region. But getting a new fleet of aircraft flying quickly may need more than a lifting of sanctions.

Source: Reuters


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