With sanctions lifted, Western aircraft companies look for sales in Iran
After the implementation of the international nuclear deal that led to the lifting of sanctions against Iran earlier this month, the Islamic Republic is planning to update its aging aircraft fleet through trade with Western companies.
Italian Presidency Press Office via Reuters
With a slate of economic sanctions against their country lifted, Iranian officials hope to rejoin the international trade markets and begin doing business with Western companies again.
Compliance with the Joint Comprehensive Plan of Action – the Iran nuclear deal agreed upon last July – allows for the removal of United Nations sanctions, the eventual rollback of some European Union sanctions, and the end of secondary sanctions imposed by the United States. While EU and primary US sanctions remain in place, Iran is now free to do business with countries and businesses from which it was previously blocked, and it has access to an estimated $100 billion in formerly frozen funds.
Now that the Islamic Republic is allowed to participate in global commerce, one of its first moves is to reintegrate with the markets and begin working on trade deals with other countries. Iranian President Hassan Rouhani, along with more than 100 Iranian officials and merchants, will travel to Paris and Rome this week in the hopes of promoting its business relations.
“This is a very important visit,” an Iranian official told Reuters. “It's time to turn the page and open the door to cooperation between our countries in different areas.”
One of Iran’s top priorities is to make a deal that would modernize its aging fleet of airplanes. The sanctions have prevented Iranian airlines from updating their fleets and properly repairing their craft. Coupled with a lack of strict regulations for the country’s major airlines, this has caused Iranian air travel to be among the most dangerous in the world, with fatal crashes occurring nearly every year.
With many of the tough sanctions now lifted, the Iranian government has jumped on the chance to trade with some of the world’s top aircraft companies. At a Sunday aviation conference, Iran announced its intentions to purchase about 160 airplanes from European companies.
Asghar Fakhrieh Kashan, Iran’s Deputy Transport Minister, said that the republic had provisionally agreed to buy eight double-deck, wide-body Airbus A380s, according to Reuters. A deal between Tehran and Airbus, which could be finalized during Rouhani’s visit this week, may also bring Iran many of Airbus’ short-range A320s and longer-range A330s and A350s.
“We have listened to the Iranians, and we are ready to engage in commercial negotiations,” Airbus Vice President of Media Relations Stefan Schaffrath told The New York Times.
In addition to a deal with Airbus, Iran hopes to acquire about 40 airplanes from Europe’s ATR, which is partially owned by Airbus, and about 100 aircraft from Boeing. While the European aviation companies could see progress in their talks with Iranian officials and businesspeople this week, a Boeing contract with Iran could take more time. The US-based company is currently blocked from trade with Iran by the primary sanctions still in effect, which means that any deal would likely require special government permissions to move forward.