Iran Eyes Boeing Planes to Modernize Aging Fleet
January 24 2016 - 9:10PM
Dow Jones News
TEHRAN—Boeing Co. could benefit from a potential bonanza of
plane orders from Iran, the country's transport minister said
Sunday, as the Islamic Republic seeks to upgrade its aging aircraft
fleet with deals that could also include Airbus Group SE A380
superjumbos.
Iran is eager to re-establish ties with Western companies
following the lifting of sanctions as part of a wider accord to
significantly constrain the country's nuclear activities. It has
already said it agreed to buy Airbus jetliners, though the European
plane maker hasn't confirmed an order beyond saying it could enter
into business with Iranian airlines in compliance with
international laws.
"We are open to buying from Boeing," Iranian Transport Minister
Abbas Akhoundi said in a brief interview little more than a week
after the U.S. and Western countries agreed to lift an embargo on
aircraft sales to Iran.
Years of sanctions, some imposed in the wake of its revolution
in 1979 rather than over the country's nuclear program, have left
Iran with one of the world's oldest aircraft fleets, which it is
eager to modernize.
"We need short-, middle-range and longer-range airplanes," Mr.
Akhoundi said at the first Iran Aviation Summit organized by the
CAPA Centre for Aviation Consultancy. Aviation would be key to
reviving the country's tourism industry, he said.
Boeing has said: "There are many steps that need to be taken
should we decide to sell airplanes to Iran's airlines. For now, we
are assessing the situation."
The Airbus deal would be for 127 planes and address fleet plans
through 2022, Iran's deputy transport minister for finance and
international affairs, Asghar F. Kashan, said in an interview. It
would include eight A380 superjumbos, with deliveries of the
double-deckers starting around 2019.
Such an order would be a big boost for Airbus, which has
struggled to find buyers for its flagship plane. Many airlines have
shied away from the jet, which has a list price of $432.6
million.
Mr. Kashan said the Airbus deal would be mostly for new A320
single-aisle planes, but would also include A330 and used A340
long-haul planes. Iran also plans to buy 16 A350 jets, Airbus's
newest long-range jet.
Airbus and the plane maker's government-owned export credit
agencies will help finance the transaction, he said.
Airbus Chief Executive Tom Enders last week said Iran was "a
huge market" whose carriers could place 400 to 500 plane orders in
the coming years.
Deals for all of the new planes could be formally announced when
Iranian President Hassan Rouhani visits Paris this week, Mr.
Akhoundi said.
Mr. Kashan said Iran also may buy 40 turboprop short-haul planes
from ATR, the joint venture between Airbus and Italy's Finmeccanica
SpA. Deliveries would unfold this year and next, he said.
He said it was unclear how soon a deal with Boeing could be
completed. The plane maker still was trying to sort out how to deal
with Iran and comply with U.S. Department of the Treasury's Office
of Foreign Assets Control rules, he said.
Iran Air, the country's flagship airline, has a fleet with an
average age of more than 25 years, according to research service
AeroTransport Data Bank, though some of those aircraft aren't
actively flown.
The European Union has placed restrictions on which aircraft the
carrier can operate in Europe because of safety concerns.
Mahdi Hashemi, chairman of the Iranian parliament's
civil-aviation commission, said there was urgency to rapidly expand
the fleet of around 150 aircraft to 500 within three to five years,
adding that new planes also would boost safety.
Western airlines are also expected to benefit in the short term
following the lifting of sanctions.
Several Western carriers are making plans to boost service to
and from Iran to take advantage of growing business ties.
Dutch airline KLM is considering restarting services to Tehran,
though the carrier is still assessing whether all sanctions have
been removed, Chief Executive Pieter Elbers said. Air France last
year announced plans to resume services to and from Tehran. British
Airways is actively considering starting flights to the Iranian
capital, Willie Walsh, chief executive of the airline's parent,
International Consolidated Airlines Group SA, said last week.
Mr. Akhoundi said Iran also plans to spend $250 million to
upgrade its air-traffic management systems.
Iran's airspace has become busier even ahead of sanctions
relief. Fighting in neighboring countries has driven airlines to
fly routes over Iran.
Mr. Akhoundi said the country had opened new corridors for
flights and would work to assure a high degree of safety of its
airspace.
Write to Robert Wall at robert.wall@wsj.com
(END) Dow Jones Newswires
January 24, 2016 20:55 ET (01:55 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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