Proposed Boeing-Iran Air Deal Involves 80 Jets -- Update
June 23 2016 - 5:24PM
Dow Jones News
By Jon Ostrower and Doug Cameron
Boeing Co. aims to sell 80 jets directly to Iran Air as part of
a proposed deal worth up to $17.6 billion, as eased U.S. sanctions
open the way for the Islamic Republic to rebuild its airliner
fleet.
The deal's value, based on list prices, would be among the
largest by a U.S. firm since the sanctions were loosened. Boeing
hadn't previously disclosed the size of the preliminary sale agreed
upon this week, but provided details in a letter to two lawmakers
who had expressed concerns about a deal, a copy of which was
reviewed by The Wall Street Journal.
The Boeing sale would include a mix of its smaller and
long-range aircraft, including four of its 747-8 Intercontinental
jumbo jets, according to a person briefed on the agreement.
The order has yet to be finalized and requires U.S. government
approval. Iran is also buying planes from Airbus Group SE to
replace its airlines' aging fleet.
Iran Air is looking to buy 40 Boeing 737 Max jets and six of the
current-generation single-aisle plane. Boeing said in the letter it
would also help the airline lease 29 new 737s, which the person
briefed on the talks said would also be the existing model.
The airline also wants to buy 15 long-range Boeing 777-300ER
jets and 15 of the future-generation 777-9X aircraft, according to
the person.
A finalized deal would provide a big boost to the
current-generation 777 program as Boeing needs more orders to
sustain production as it transitions to its new 777X jetliner later
this decade.
Iran Air operated vintage 747 jets long-past their standard
retirement age, and adding four of the latest-generation 747-8
jumbos would boost a program that has just 22 unfilled orders. It
remains unclear if Iran Air would take four newly manufactured 747s
or four already-built jumbos that were to be delivered to the
defunct Russian airline Transaero.
Deliveries of the Boeing jets are due to run from next year
until 2025, according to the letter.
Iran Air isn't looking to acquire any long-range 787
Dreamliners, with new customers facing a waiting list of several
years for the plane.
Boeing is moving slowly to complete any deal with Iran, aiming
to avoid running afoul of the U.S. Government or members of
Congress who have objected to the aerospace giant's dealings with
Iran Air. The carrier was removed from the U.S. sanctions list
along with nearly 400 other entities as part of the nuclear pact
between Iran and six world powers.
"You can be assured that if at any time we become aware that any
party with which we are conducting business is no longer approved
by the U.S. Government that we will cease doing business with that
party," wrote Tim Keating, Boeing's senior vice president of
Government Operations, in the letter.
All the aircraft tentatively ordered by Iran Air are powered by
engines manufactured by General Electric Co. The single-aisle 737s
are powered by CFM International engines, which is a joint venture
between GE and Safran SA.
"It's too early for GE to comment on the agreement," said a GE
spokeswoman.
Write to Doug Cameron at doug.cameron@wsj.com
(END) Dow Jones Newswires
June 23, 2016 17:09 ET (21:09 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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