Iran Air signs with Airbus for 118 new airframes (including A380)

[chuboy]

http://www.airbus.com/newsevents/news-events-single/detail/iran-deal/

Iran officials have signed two agreements with Airbus covering new aircraft orders and a comprehensive civil aviation co-operation package. The agreements were signed at the Élysée Palace, Paris, during Iranian President Hassan Rouhani’s official visit to France with French President François Hollande.

Iran Air has signed an agreement with Airbus for the acquisition of the full range of new Airbus airliners (73 widebodies and 45 single aisle). This includes pilot and maintenance training and support services to help the entry into service and efficient operations of these new aircraft.

In parallel the Minister of Roads and Urban Development, Dr. Abbas Ahmad Akhoundi, has signed a comprehensive co-operation agreement as part of the country’s modernisation of its civil aviation sector, to support the development of air navigation services (ATM), airport and aircraft operations, regulatory harmonization, technical and academic training, maintenance, repair and industrial cooperation.

These two agreements took place as part of the implementation of the JCPOA (Joint Comprehensive Plan Of Action) on January 16th 2016, and its associated rules and guidance.

The agreement for 118 new aircraft signed by Mr Farhad Parvaresh, Iran Air Chairman and CEO, includes 21 A320ceo family, 24 A320neo family, 27 A330ceo family, 18 A330neo (-900), 16 A350-1000 and 12 A380.
"Today’s announcement is the start of re-establishing our civil aviation sector into the envy of the region and along with partners like Airbus we’ll ensure the highest world standards,” said Mr Farhad Parvaresh, Iran Air Chairman and CEO.
“The skies have cleared for Iran’s flying public and Airbus is proud to welcome Iran’s commercial aviation back into the international civil aviation community. Today is a significant step in the overhaul and modernisation of Iran’s commercial aviation sector and Airbus stands ready to play its role in supporting it,” said Fabrice Brégier, Airbus President and CEO.

Airbus is the world’s leading aircraft manufacturer of passenger airliners, ranging in capacity from 100 to more than 500 seats. Airbus has design and manufacturing facilities in France, Germany, the UK, and Spain, and subsidiaries in the US, China, India, Japan and in the Middle East. In addition, it provides the highest standard of customer support and training through an expanding international network.

[msbbarratt]

Someone's being doing a lot of preparatory work behind the scenes by the looks of it. Not a bad start to Airbus's year.

It's interesting to think what might happen in the (hopefully) happy future where Iran is comfortably reintegrated back into world society and everybody is friends again. Emirates, Qatar and Etihad are busily setting themselves up as superhub-centred airlines in Dubai, Doha and Abu Dhabi. Their geographical position gives them unparalleled single-hop access to a very large fraction of the world's population. And of course, Iran is in the same neck of the woods, as is Turkey. Turkey are already planning a major new airport to allow their airlines to also become very superhub-ish. And there's plenty of hydrocarbons locally to fuel it all.

So in the future we might be seeing some monumental competition between five airlines all located within a couple of hours of each other. That could seriously change whatever passes for the current global airline industry status quo.

Ok so that's a looong way in the future, but other airlines are going to have to start planning on the assumption that what I've outlined above may one day happen.

[Andy_S]

Lets not get ahead of ourselves.

Any order by Iran for Airbus aircraft will depend on granting of US export licenses. I’m not saying the USA will deny these, but still……

Also, this ‘order’ will need to be financed. Where’s the money coming from?

[El Bunto]

Also, this ‘order’ will need to be financed. Where’s the money coming from?
Do you ask the same when other airlines place big orders? Usually their financing is built on a house of cards, with all sorts of byzantine financial instruments propping each other up. Iran Air doesn't have that problem.

Iran has over $100 billion in oil revenue frozen in various banks around the World. The cessation of sanctions will release the majority of that; Iran has been consistently selling oil to China, Turkey and a host of other countries but because of sanctions the buyers held the payment in escrow.

And then there is the money that the USA seized; a couple of weeks ago Iran received the first tranche of funds that were trapped in US banks since 1979; $400 million plus $1.3 billion in interest.

[PC767]

Perhaps there's a logical answer, but on the face of it, why would Airbus need US permission to sell aircraft?

[Rwy in Sight]

Perhaps there's a logical answer, but on the face of it, why would Airbus need US permission to sell aircraft?

Because a lot of parts from those planes, besides the engines, come from the US. So it is not a question of permit to sell but permit to export.

[msbbarratt]

Any order by Iran for Airbus aircraft will depend on granting of US export licenses. I’m not saying the USA will deny these, but still……

Er, I think that Airbuses are ITAR free, meaning the US has no say whatsoever. They're making A320s in China, and a while back there was talk of turning making an ITAR free MPA from an A320. A very large chunk of Airbuses are European through and through. The parts that come from, for example, Honeywell are unlikely to be contentious anyway.

The international sanctions that applied to Iran up until very recently were a different matter. Amongst other things that the UN sanctioned, the US used their banking might to stop financial institutions all over the world to stop doing business with Iran.

Companies do have to be quite careful - Toyota is having to explain why ISIL are driving around in shiny new Toyota pick-ups. They're not supposed to be able to get hold of them...

The only conceivable ITAR problem would be if they wanted GE engines. But then there's always RR and the CFM engines are part French anyway.

The US couldn't believe that Alenia built an ITAR free satellite and sold it to the Chinese. They kicked up one hell of a fuss over it, didn't get anywhere.

With the US not necessarily being the hotbed of R&D (of this sort) that it once was (a consequence of reduced defence spending), they're going to have to accept that other countries are perfectly capable of out-developing them in high tech stuff. Plus American companies cannot afford to be restricted by their own government's rules. So they develop outside of the US if they have to (AMD in Germany, Intel in Israel, IBM all over), even if the fundamental research was originally done in the US. The constitution's freedom of speech clause overrides ITAR.

[tdracer]

You still need an export license, even if it's not ITAR (trust me, I have to deal with this crap on a regular basis - just talking to a foreign national can get me crossed up with export control laws).


I'm not saying the US will try to stop Airbus from selling to Iran or refuse to issue the necessary export licenses, but it would be nearly impossible for Airbus to deliver an aircraft to Iran if they did.

[Metro man]

Back in the 1970s, Iran Air was a top level airline with a safety record comparable to QANTAS and excellent inflight service. Even with the sanctions in place for nearly forty years they still managed to keep going.

With the country opening up and the large numbers of Iranians abroad there is fantastic potential for the airline, especially with its location being ideal for one stop connections.

I doubt alcohol will be served and women will need to cover up in Tehran so there are limitations that the other Middle East three don't have, but the possibilities are immense.

[msbbarratt]

You still need an export license, even if it's not ITAR (trust me, I have to deal with this crap on a regular basis - just talking to a foreign national can get me crossed up with export control laws).Ah, apologies. How confusing! I know what ITAR is all about. I'm left wondering what the purpose of a separate export licensing system is. Oh well. It sounds like people such as yourself are likely filling in two lots of paperwork for Uncle Sam.

I'm not saying the US will try to stop Airbus from selling to Iran or refuse to issue the necessary export licenses, but it would be nearly impossible for Airbus to deliver an aircraft to Iran if they did. There are enough US components left in Airbus for that. However the point remains that if the US government unreasonably (given that there's plenty of Airbuses in China) started playing hardball on such matters it would simply be encouraging Airbus to develop alternatives. That would also cost US jobs, which never looks good. It wouldn't be easy for Airbus in the short term, but they would see it as imperative for their business to survive.

The US Government will still be keen to ensure that the Iranians can't restore too many of their F14s to flight, but I don't suppose that there's many parts on an Airbus that would fit.

[crewmeal]

At $28 a barrel they'll need to sell a hell of a lot of oil to pay for that lot, if as some suggest the US give permission. Good luck to Airbus. Have Boeing been left behind?

[Andy_S]

Have Boeing been left behind?

It's been suggested that the Iranians are interested in talking to Boeing as well as Airbus. One wonders if the Americans might be more amenable to granting export licenses for Airbus components if Boeing are allowed to join the party.

[Metro man]

Iran Air was a mainly Boeing operator before the Islamic revolution and has considerable experience with the manufacturer from the B707 onwards. It continued to operate obsolete Boeing types due to sanctions.

When placing orders for aircraft, talking to more than one company will generally get you a better price even if you have already made up your mind which type to go for.

British Airways used to be so committed to Boeing that Airbus didn't bother trying for their business. When BA ordered A320s, their executives had to go to to Toulouse and persuade Airbus that they really were interested in ordering the type and not just playing them off to get a better deal from Boeing.