Northwest Arkansas Democrat-Gazette
Boeing makes $3B deal to sell 30 airplanes to Iranian carrier
TEHRAN, Iran — Boeing Co. said Tuesday that it has signed a new, $3 billion deal with Iran Aseman Airlines to supply 30 737 Max aircraft to the carrier, the first major sale by a U.S. company to the Islamic Republic under President Donald Trump.
The pact adds to a separate $16.6 billion agreement with Iran Air, which the company is still finalizing. If completed, the transactions would be the first U.S. aircraft sales to Iran since the 1970s.
The latest jet sale puts Trump’s policy of promoting U.S. manufacturing jobs into conflict with the administration’s vow to take a tougher stance on Iran, including by restricting travel to the U.S. If the White House thwarts the Boeing sale, it also risks tilting the playing field in favor of European plane-maker Airbus Group SE as global jet sales are slowing, said aerospace consultant Richard Aboulafia.
Boeing may be “setting themselves up for conflict with the Trump administration or Republicans in general,” said Aboulafia, vice president with Teal Group. “To a certain extent they are imposing a level of conflict on Republicans, because they are going to have to balance manufacturing jobs to export markets with getting tough on Iran. It’s tough to thread that needle.”
“According to the U.S. Department of Commerce, an aerospace sale of this magnitude creates or sustains approximately 18,000 jobs in the United States,” Boeing said in a statement. “Boeing continues to follow the lead of the U.S. government with regards to working with Iran’s airlines, and any and all contracts with Iran’s airlines are contingent upon U.S. government approval.”
Boeing and Airbus have been making inroads in Iran since former President Barack Obama’s administration and other world powers agreed to lift sanctions on commercial-jet sales as part of the Middle Eastern coun-
try’s nuclear deal with world powers. Whether Chicagobased Boeing closes the sales is far from certain, particularly given the hostility among some Republicans to any deal with Iran.
Financing the multibilliondollar purchase also will be a challenge given the restrictions still in place on lenders, Aboulafia said. Aircraft lessors may be hesitant to back the purchase if the threat of renewed sanctions raises a risk they couldn’t reclaim the planes.
The Iran Aseman deal,
announced in a statement on Boeing’s website, provides the airline with an option to buy 30 additional 737 Max planes. Deliveries of the single-aisle jet are scheduled to start in 2022. The value is based on list prices, which typically are heavily discounted.
The purchase will help modernize Iran Aseman’s fleet after the carrier in December was banned by the European Union for “unaddressed deficiencies.” The European Commission, the EU’s executive arm, has maintained a blacklist of airlines since 2006 after a series of crashes prompted European governments to seek a uniform approach to airline safety.
The Iranian carrier operates 33 planes, including two Boeing 737s and five Boeing 727s, according to its website. Nearly half of the fleet consists of Fokker 100 aircraft. The carrier reached an earlier pact to lease seven Airbus planes.
Boeing’s December agreement with Iran Air was the first of its kind since the Islamic Revolution. The company’s last airplane deliveries to Iran were 747 jumbos that arrived in 1977, according to the company’s website. While Boeing and Iran’s flag carrier are still working out final terms for deliveries that would begin next year, Airbus has delivered the first
aircraft for its separate $19 billion sale.
On the campaign trail, Trump attacked a planned center to paint Boeing 737s in China and blasted the contract for the Air Force One presidential aircraft as too costly. Subsequent meetings with Boeing Chief Executive Officer Dennis Muilenburg brought a significant thaw. Trump in February attended the rollout of a new Boeing jet from a factory in South Carolina, extolling the “beautiful” carbon-composite 787-10 and praising the CEO as “a very, very tough negotiator.”