Visa row overshadows Iranian plane deals
Arow over US visa bans may further weaken Iranian President Hassan Rouhani’s efforts to attract foreign investors to Iran, particularly if it slows the implementation of deals for Western aircraft, officials and analysts said. The deals for 80 Boeing jets and 100 from Europe’s Airbus struck last year are seen by Western investors as a crucial test as they seek business in Iran in the wake of the nuclear deal that led to the lifting of most sanctions.
People involved in the airline deals say it is too early to assess the impact of the United States visa ban but worry that hardening rhetoric in Tehran and Washington can only add to a list of complications that could slow, if not endanger, the jet sales.
While Airbus planes come from Europe, the administration of US President Donald Trump can veto the sale of all the planes to Iran because of the widespread use of US parts in the aircraft which need US export licenses.
The visa ban could also prolong a hiatus in talks about financing deliveries of jets, with European and Chinese banks reluctant to put up money to back Iranian jet purchases for fear of a backlash against their US operations.
“It will make people more nervous, more risk-averse, more inclined to wait and see,” said a senior Western financier, who asked not to be named.
Iranian officials say that even before Trump imposed restrictions on travel to the United States from seven mainly Muslim countries, concerns about what the new US president might do had already put the brakes on post-sanctions business.
During his election campaign, Trump criticised the nuclear accord six major powers struck with Iran and his victory in November increased uncertainty around Iran’s investment drive.
“The process has been very slow... foreign investors were very interested to work in Iran, but since Trump’s election the process has almost stopped.
Investors are worried about possible US punishments if they work with Iran,” a senior economy ministry official said.
Final decisions on whether the plane deals go ahead may well lie with Trump and Iran’s Supreme Leader Ayatollah Ali Khamenei, the ultimate broker in the country’s politics who has the last say on key matters.
Since taking office this month, Trump has largely ignored the Iranian jet deals in public, even as he lambasted US aerospace firms including Boeing about other projects.
For now, at least, Boeing appears comfortable that Trump won’t automatically block its deal, though questions also remain over further approvals from Iran, two industry sources said.
Still, any long-term US travel curbs could also undermine the case for longdistance jets capable of linking Tehran with expatriate communities in cities such as Los Angeles.
Boeing plans to start large 777 jets in 2018.
IranAir has already cancelled orders for Airbus A380 superjumbos, initially meant to signal its ambitions to compete on equal terms with the hubs of Gulf rivals.
Besides the Boeing and Airbus orders, state airline IranAir is planning to buy 20 small Franco-Italian ATR turboprops to help expand economic development to smaller Iranian cities.
But officials say a final deal has been held up due to uncertainty over some licences for engines made by a Canadian subsidiary of Pratt & Whitney, America’s top military engine maker and supplier to the F-35 fighter project. delivering its