US reviews Iran’s jet purchases

For Boeing, losing the IranAir deal could affect 777 production

The US Treasury is reviewing licences for Boeing Co and Airbus to sell aircraft to Iran, department head Steven Mnuchin said on Wednesday, telling lawmakers he would increase sanctions pressure on Iran, Syria and North Korea.

“We will use everything within our power to put additional sanctions on Iran, Syria and North Korea to protect American lives,” Mnuchin said in testimony to the House Ways and Means Committee. “I can assure you that’s a big focus of mine and I discuss it with the president.” Mnuchin did not elaborate on the review of the licences, which were issued under a 2015 agreement between Tehran and world powers to lift sanctions in return for curbs on Iran’s nuclear activities.

His statements followed President Donald Trump’s Middle East trip, in which he called on Iran to stop funding “terrorists and militias”. The review suggests that Trump’s support for Boeing’s defence and jetliner businesses could have political limits. Iran says halting the aeroplane deals would breach the 2015 nuclear agreement.

Mnuchin told the Ways and Means hearing that sanctions “really work” and were responsible for bringing Iran to the negotiating table ahead of the nuclear deal.

For Boeing, losing the IranAir deal could affect 777 production, since 15 of the widebody jetliners are included in the first approved batch of Boeing aircraft due for delivery to IranAir by 2020. Deliveries start in May next year. Boeing said in December it would cut 777 output by 40 per cent this year under plans that include IranAir’s still-tentative order.

IranAir has agreed to buy 200 US and European passenger aircraft worth up to $37 billion (Dh136 billion) at list prices, though such deals typically include big discounts.

They include 80 jets from Boeing, 100 from Airbus and 20 turboprops from Franco-Italian ATR. All the aircraft need US licences because of their reliance on US parts.