Iran’s Air­bus jet pur­chase gets boost from lease fi­nance deal

Kuwait Times - - BUSINESS -

Iran has reached a deal with a for­eign leas­ing com­pany to fi­nance the first 17 jets it plans to buy from Air­bus, break­ing a log­jam in ef­forts to im­port air­craft fol­low­ing the lift­ing of sanc­tions, peo­ple fa­mil­iar with the move said. The deal re­moves a sig­nif­i­cant hur­dle to se­cur­ing the first tranche of jets, fol­low­ing un­cer­tainty over fi­nanc­ing and po­lit­i­cal op­po­si­tion in the United States and Iran, though the sources cau­tion months of talk­ing have thrown up new po­ten­tial hur­dles.

Ira­nian of­fi­cials de­clined to name the lessor in­volved, but in­dus­try sources said in Septem­ber that Iran was in ad­vanced talks with the United Arab Emi­rates’ Dubai Aero­space about help­ing to fi­nance the pur­chase.

“We have a deal to fi­nance the first 17 air­craft,” a se­nior Ira­nian of­fi­cial told Reuters, with­out elab­o­rat­ing. Dubai Aero­space and Air­bus both de­clined to com­ment. Un­der the deal, the leas­ing com­pany would take over part of Iran’s or­der for dozens of new jet­lin­ers and then lease them to the coun­try’s flag car­rier. A sim­i­lar mech­a­nism could be used to fi­nance a pro­vi­sional or­der for 20 tur­bo­props from ATR, which is half-owned by Air­bus, one of the peo­ple said. ATR had no im­me­di­ate com­ment.

Tehran pro­vi­sion­ally or­dered more than 100 jets each from Air­bus and Boe­ing this year af­ter a deal with ma­jor pow­ers to lift most sanc­tions on Iran in ex­change for curbs on nu­clear ac­tiv­i­ties.

Com­plet­ing the rest of the Air­bus deal de­pends on re­ceiv­ing US ex­port li­censes be­cause of the num­ber of US com­po­nents in the air­craft. So far Air­bus has US li­censes for 17 jets. Air­bus will un­usu­ally be paid in eu­ros, avoid­ing dol­lars typ­i­cally used by the air­craft in­dus­try. The US fi­nan­cial sys­tem re­mains closed to Iran un­der core sanc­tions dat­ing back to the Is­lamic Repub­lic’s 1979 rev­o­lu­tion.

Talks are ex­pected to re­sume soon be­tween Iran and Boe­ing to fi­nal­ize the US com­pany’s deal to sell or lease more than 100 jets: a trans­ac­tion that could also in­volve third par­ties. A Mid­dle East spokesman for Boe­ing, Fakher Dagh­es­tani, said it had been al­lowed by the US gov­ern­ment to talk to ap­proved Ira­nian air­lines and that any fi­nal agree­ments would need fur­ther US ap­proval.

EYES ON ELEC­TIONS

The air­plane deals rep­re­sent a big eco­nomic prize for West­ern com­pa­nies and also help the Ira­nian sup­port­ers of a more open re­la­tion­ship with the West af­ter years of near iso­la­tion. But ne­go­ti­a­tions have been held up by the re­luc­tance of many West­ern banks to pro­vide fi­nance, fear­ing a reg­u­la­tory back­lash if there is a new set­back in re­la­tions. In par­tic­u­lar they are con­cerned that the out­come of Tues­day’s US pres­i­den­tial elec­tion could lead to a new set of sanc­tions. Repub­li­can can­di­date Don­ald Trump and con­ser­va­tives in Congress have heav­ily crit­i­cized the nu­clear deal. Sources say the gov­ern­ment of Pres­i­dent Has­san Rouhani is keen to fi­nal­ize con­tracts be­fore the end of Iran’s fis­cal year in March, boost­ing chances of se­cur­ing the first high-pro­file de­liv­ery in time for Iran’s own pres­i­den­tial elec­tions in May.

“We have dead­lines to meet,” the Ira­nian of­fi­cial said. Rouhani, who is seen in Iran as a prag­ma­tist, has been harshly crit­i­cized by hard­line ri­vals over the deals aimed at re­new­ing Iran’s age­ing air fleet.

Newspapers in English

Newspapers from Kuwait

© PressReader. All rights reserved.