US exit from nuclear deal and renewed sanctions thwart Iran aviation ambitions

Trump to revoke Boeing, Airbus licences for plane sales to Iran

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Iran, which had ambitions to turn Tehran into a regional aviation hub, has been denied the opportunity to renew its ageing fleet of aircraft after the US withdrawal from a nuclear pact with the Islamic Republic barred plane sales by Boeing and Airbus.

US President Donald Trump’s decision to exit the Joint Comprehensive Plan of Action (JCPoA) and restore wide-reaching sanctions on Iran has closed the door for planemakers and lessors to do business with the country. Licences for aircraft manufacturers Boeing and Airbus to sell jets to Iran will be revoked, US Secretary of Treasury Steven Mnuchin, said on Tuesday.

Iran had ordered 200 passengers planes: 100 from Airbus, 80 from Boeing and 20 from French-Italian turboprop maker ATR. The deals depend on US licences because of the use of American parts in commercial aircraft. The plane orders were sorely needed to overhaul Iran’s outdated fleet, after a series of air accidents that called into question the safety of its airlines’ operations. With the trade thaw under the 2015 nuclear deal, Iran placed aircraft orders that provided a rare opportunity to reshape its aviation industry and gave planemakers a historic chance for sales to a lucrative market. The reinstatement of sanctions represents a lost opportunity for Toulouse-based Airbus, Chicago-based Boeing and American plane engine-makers such as General Electric.

“We will consult with the US government on next steps. As we have throughout this process, we’ll continue to follow the US government’s lead,” a Boeing spokeswoman said in an emailed statement.

The US planemaker, cognisant of the risk of a deal snap-back, did not record the Iranian jets on its backlog. ATR has delivered eight planes to Iran Air and said it had no comment on the US announcement.

Airbus has 97 planes for Iran on its backlog. It has delivered one A321 and two A330s to Iran Air since the 2016 deal.

“We’re carefully analysing the announcement and will be evaluating next steps consistent with our internal policies and in full compliance with sanctions and export control regulations,” an Airbus spokesman said in an emailed statement.


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Last month, Boeing chief executive Dennis Muilenburg said the company had no aircraft due to be sent to Iran this year.

“We have no Iranian deliveries that are scheduled or part of the [production] skyline this year, so those have been deferred in line with the US government process,” he said on an April 25 conference call. “I can tell you with confidence that we have continued to build risk mitigation into our 777 production plan.”

The US decision has also closed the door for plane lessors to do business with Iran, which had said that one alternative to get faster jet deliveries would be through leasing options.

Dubai Aerospace Enterprise, which joined the ranks of the top five global lessors when it bought Dublin-based AWAS last year, said the US decision eliminated the chances of trading with that country.

“The opportunity to do business for us is ... not there anymore," Firoz Tarapore, chief executive of Dubai Aerospace Enterprise, told CNBC.

DAE does not do business in Iran at the moment, he said.

Iran said it needs between 400 and 500 planes to renew its fleet, the planes of which have an average age of about 20 years.

Multinational companies that have made big bets on Iran, from carmakers to oil companies, are examining Mr Trump’s decision to reinstate sanctions while trying to find ways to continue with their business interests in the Islamic republic, possibly by obtaining exemptions or waivers.