Boeing and Airbus, who in the past have announced deals with Iranian airlines for sales of some 300 planes worth $40 billion, were relieved on Friday to find out that President Trump will not, for the time being, re-impose sanctions on the Islamic Republic for failing to comply with international demands to curb its ballistic missile tests and its terror network across the Middle East.
According to AP, Boeing and Airbus have so far signed contracts to sell 180 planes to Iran, and have been working on deals for many more planes. The Iranians for their part are desperate to modernize their aviation industry, which has experienced 30 accidents between January 21, 1980 and August 9, 2014. Iranian airlines have been barred from buying new planes from Boeing and Airbus, and couldn’t procure spare parts for its fleet that dates back to the 1970s.
Last year, according to AP, Boeing reported signing a contract to sell planes worth $16.6 billion to Iran Air, including 30 large 777s and 50 737 Max 8s, one for long distance flights, the other for short-hauls. That announcement coincided with an Airbus announced deal with Iran Air selling 100 planes for at least $18 billion, including A320s, A330s and A350s.
Besides its tendency to spread death and suffering in the region, AP reported another, much more important reason why international banks may be reluctant to finance the above rich deals: Iran is yet to sign the Cape Town Agreement, which allows lenders to repossess capital assets – planes, for instance, should the buyer fail to make payments. Should a new set of US sanctions once again slow down Iran’s economy, it might find itself unable to pay for the deals it had signed.
The temporary reprieve both giants have received from the President’s sending the sanctions on Iran’s low compliance with its international obligations may not matter in the long run, should Congress decide to bury Tehran in a new barrage of sanctions. According to AP, both Boeing and Airbus plan to supply their planes to the Iranians over the next eight years or so – and many unhappy consequences of Iran’s misbehavior may threaten their future over this period.