U.S. Grants Licenses to Airbus and Boeing for Iran Air Sales

 - September 21, 2016, 11:08 AM
An Iran Air Airbus A300 approaches London Heathrow Airport. (Photo: Flickr: Creative Commons (BY-SA) by allenthepostman)

(Story updated to include information on Boeing)

Airbus and Boeing have each received licenses from the U.S. Treasury Department’s Office of Foreign Asset Control (OFAC) to move ahead with sales of airliners to Iran Air, the companies confirmed Wednesday. In the case of Airbus, the license—the first of two for which the European airframer applied—covers “short-term” deliveries of 17 A320s and A330s to Iran Air. For Boeing, the OFAC license allows it to complete negotiations over a Memorandum of Agreement with Iran Air covering 80 airliners of various type, including 737s, 777s and 787s. Boeing has also agreed to help arrange the lease of another 29 of its jets to Iran Air.

In a written statement, Boeing said it remains in talks with the airline over the terms of a Memorandum of Agreement signed in June covering what at the time remained an undisclosed number of jets. Since then Iranian sources have put the total number at 109, although Boeing has not confirmed that figure. “We have received that license and remain in talks with Iran Air based on the MOA,” said the Boeing statement. “Any final sales agreement would have to adhere to the license we’ve been issued.”

Airbus said it expects to receive a second license “in the coming weeks”

“We welcome the OFAC decision to issue a first license to deliver Airbus aircraft to Iran Air,” said Airbus in a statement. “Airbus was the first company to sign an agreement with Iran Air in the framework of the JCPOA (Joint Comprehensive Plan of Action) and associated rules and guidance and we are pleased to have now a first license that will allow us to start implementing this agreement.”

Implemented in January, the JCPOA calls for Iran to significantly curb its nuclear ambitions and allow the International Atomic Energy Agency regular access to its facilities for inspection. Under the terms of the agreement, Airbus and Iran Air signed a contract covering orders for 21 airplanes from the current A320 family, 24 A320neo-family airplanes, 27 of the current A330 family, 18 A330-900s, 16 A350-1000s and 12 A380s. The deal for the A380s came as a particularly welcome boost for Airbus, which has struggled mightily to sell the superjumbo in recent years.

For Boeing, its contract would mark the first aircraft order between the Chicago-based company and Iranian airlines since the U.S. government placed sanctions on the Iranian regime following the country’s 1979 Islamic Revolution. It would also mark the largest commercial deal between U.S. and Iranian companies since the Obama Administration lifted the sanctions in January as part of a nuclear containment deal.

Meanwhile, economic sanctions imposed on Iran by the West for many years have hindered the development of its air transport industry, leaving the likes of Iran Air with decrepit fleets of maintenance-intensive aircraft, many acquired before the 1979 Islamic Revolution. A lack of availability of spare parts kept many airplanes grounded or flying in questionable condition, making Iran’s airlines some of the world's most accident-prone. 

Separately, Franco-Italian turboprop maker ATR continues to wait for its OFAC license to proceed with the sale of 20 ATR 72-600s to Iran Air.