Iran Aims for Ambitious Aviation Revamp
January 25 2016 - 1:39PM
Dow Jones News
By Robert Wall and Benoît Faucon
TEHRAN--As Iranian officials scramble to reconnect to the global
economy, one sector is getting early clearance for takeoff: its
creaky aviation industry.
In a raft of early deals and talks following the lifting of
broad economic sanctions against Iran, officials and aviation
executives here have signaled they are targeting an ambitious
revamp of the country's aviation infrastructure. Such a rebuild
would come as Tehran already starts to renew its aging fleet of
commercial jetliners. The moves could help lure more business to
Iran as well as, eventually, tourism.
Tehran is tapping French airport operator Aéroports de Paris and
construction-to-media conglomerate Bouygues SA to design and build
a new terminal at Tehran's Imam Khomeini International Airport,
according to people familiar with the matter. French construction
firm Vinci SA is expected to develop and operate airports in
Mashhad and another Iranian city, the people said. Both deals were
first reported earlier Monday by The Wall Street Journal.
But Iranian officials are also courting foreign partners to help
the country's aviation industry do everything from repair planes to
rent jetliners. The sector has been hampered by decades of
sanctions. Some of the workhorses of Iran's commercial aviation
fleet are Boeings bought before the Iranian Revolution in 1979.
Iranian officials used the eve of the lifting of sanctions just
over a week ago to announce they had agreed to buy over 100 new
jets from Airbus Group SE, though the European plane maker itself
hasn't confirmed any deal. Tehran played host this weekend to an
aviation-industry conference here aimed at attracting foreign
investors and partners.
"The Iranian aviation market is open," said Ahmadreza Bayati
Doosti, deputy for international cooperation at the
state-controlled Iran Airports Co. The country's transport
minister, Abbas Akhoundi, said that in addition to expanding the
capacity of Tehran's main international hub, Iran would court
foreign direct investment to modernize its regional airports. The
country has more than 60 operational airports. Only about 10 are
used regularly because of the small Iranian aircraft fleet, the
minister told the aviation conference here.
Iran also is in talks with potential French and Chinese
investors to develop new airports in Ahvaz in the south of the
country and the Persian Gulf coastal city Bushehr, said Bagherian
G. Hossein, deputy chief executive for planning at the Iran
Airports Co. The current airports are too close to their city
centers, so green-field developments are planned.
Iran has begun negotiations with potential investors and is
awaiting bids for the projects before picking developers for each
site, Mr. Hossein said in an interview Monday. Because Iran's
airport company lacks the funds to pay for development upfront, the
winning bidders will build the facility and run it for a fixed
period, after which ownership will transfer to the government, he
said.
Deputy Transport Minister Asghar Fakhrieh Kashan said Iran also
seeks to set up a domestic aircraft leasing company. The government
has opened talks with two potential foreign shareholders he didn't
identify. Iranian companies also are looking to foreign partners to
help win foreign business. Farsco, the country's principal
plane-repair company, is hoping to convince foreign airlines to fix
jets in Iran because of the country's low cost of labor, said
Mohammad Mirbagheri, the company's managing director.
Farsco wants to set up a joint venture with a major western
plane repair organization to help secure outside business, he said.
One potential partner, he said, is Deutsche Lufthansa AG, which
operates a large maintenance, repair and overhaul operation. The
German company didn't immediately respond to a request for
comment.
Stacy Meichtry in Paris contributed to this article.
(END) Dow Jones Newswires
January 25, 2016 13:24 ET (18:24 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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