Iran Air, the Islamic Republic’s state carrier, has signed a memorandum of understanding with Boeing Co. to buy narrow- and wide-body aircraft, in the first transaction by the U.S. planemaker since sanctions were lifted in January.
The purchase includes a mix of 737 and 777 models, Iran Air said in a statement on its website. The carrier will obtain the planes through a lease-purchase agreement, pending clearance from the U.S. and Iran. Boeing said any contracts with Iran’s airlines will depend on U.S. government approval.
The country intends to buy 100 jetliners from Boeing, Ali Abedzadeh, director of Iran’s Civil Aviation Organization, said in a newspaper interview earlier this week. There were no details on the total figure in Tuesday’s statements.
The agreement follows a $27 billion order by Europe’s Airbus Group SE in January. The plane manufacturers are competing in one of the few remaining untapped jet markets as a weak global economy saps demand in other regions. Iran says it needs 400 long-range and 100 short-range jets and sees $50 billion in aircraft investments after years of sanctions left its aging fleet in dire need of upgrading.
‘Hundreds of Airplanes’
Boeing sees an “opportunity for hundreds of airplanes” in Iran, Randy Tinseth, the planemaker’s vice president for marketing, said Tuesday. “Their biggest challenge moving forward is a question of infrastructure, but clearly there’s an opportunity.”
Iran Air, the country’s biggest carrier, currently serves 27 domestic and 29 international routes with an aging fleet that includes Boeing 747s and Fokker NV 100s. It needs the upgraded aircraft as it rolls out a 10-year plan aimed at moving from survival mode to expansion. The airline plans to use wide-body jets to reinstate long-haul routes to such cities as Tokyo and Seoul, which were halted under sanctions.
Plane deals with Iran aren’t without risks. The companies must address sanctions that prohibit banks from dollar-based transactions with Iran. Boeing must additionally take into account a political backlash in the U.S., given Iranian leaders’ penchant for anti-American rhetoric.
