BA Boeing Co

By Robert Wall 

LONDON-- Boeing Co. Tuesday said it had signed a tentative agreement to sell jetliners to Iran, in what would be one of the Islamic republic's biggest deals with a U.S. manufacturer since trade sanctions on Tehran were eased.

The proposed deal comes after months of talks between Boeing and Iran Air about a deal. Details of the potential transaction haven't been disclosed by Boeing, although Iranian Transport Minister Abbas Akhoundi told state television Tuesday that the deal could have a value of up to $25 billion, according to the Associated Press.

"Boeing confirms the signing of a Memorandum of Agreement (MOA) with Iran Air expressing the airline's intent to purchase Boeing commercial passenger airplanes," the world's largest plane maker said.

Iran's airlines have indicated a dire need for both medium-haul jets like Boeing's single-aisle 737 and long-haul aircraft like its 777 and 787 Dreamliners.

State-owned Iran Air Monday said it planned to lease 737 and 777 planes pending approval from its own government and the U.S. Completing an agreement with Iran Air could take months, amid continued uncertainty from lenders about financing deals with Iran and the need for the U.S. government to sign off on any sale.

The potential plane sale isn't without critics. Two U.S. Congressmen, Jeb Hensarling (R., Texas) and Peter Roskam (R., Ill.), last week sent a letter to Boeing expressing concern a plane deal could aid Iran's military. "Iran's commercial aviation sector is deeply involved in supporting hostile actors," they said in the letter in which they requested information to assess the national security implications of selling planes to Iran.

"Boeing will continue to follow the lead of the U.S. Government with regards to working with Iran's airlines, and any and all contracts with Iran's airlines will be contingent upon U.S. Government approval," the Chicago-based plane maker said.

John Smith, acting director of the U.S. Treasury Department's Office of Foreign Assets Control, last week said at the Atlantic Council in Washington, D.C. that "it is possible for authorized deals to get financing."

In January Airbus Group SE announced an agreement with Iran for 118 new jets, underscoring Iran's interest in restoring commercial links with Europe, as well as the country's urgent need for new commercial aircraft.

The deal, which had a list price value of about $27 billion, hasn't been completed because of concerns in the financial community about doing deals in Iran. Airbus is also still waiting for an export license from the U.S. government for the planes.

Airbus commercial airplane boss Fabrice Brégier recently said the company was making progress securing the export license, but more work was needed. He remained optimistic the deal, which would include Iran's purchase of 12 A380 superjumbos, could be completed this year.

Franco-Italian turboprop maker ATR is putting together a mix of banks and lessors to help finance the euro-denominated sale of 40 of its planes to Iran, the plane maker's Chief Executive Patrick de Castelbajac said this month. The company hopes to deliver the first of its regional planes by the end of the year.

Canadian plane maker Bombardier Inc. also said it is eyeing the Iranian market. The initial focus would be on selling regional planes, Fred Cromer, president of Bombardier Commercial Aircraft, said this month.

Iran is considered one of the most promising growth markets for plane makers after decades of sanctions have left the country with some of the world's oldest airliner fleets.

The European Union last week eased restrictions on Iran Air flights. The carrier since 2010 was limited to using a small number of specified planes to serve destinations in the EU because of safety concerns with some of the other aircraft. Those restrictions were lifted following an inspection this year for all but some of the carrier's oldest planes.

The U.S. has maintained sanctions over the sale of planes to some Iranian carriers because of concern they are involved in supporting terrorism. The Iranians deny the charge.

Aresu Eqbali in Tehran and Jay Solomon contributed to this article

Write to Robert Wall at robert.wall@wsj.com

(END) Dow Jones Newswires

June 21, 2016 06:59 ET (10:59 GMT)

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