American Boeing Signs $25 Billion Aircraft Deal With Iran

June 22, 2016

3 min read

In what might be the biggest business agreement between the Islamic Republic and America since the 1979 US Embassy takeover in Tehran, the aircraft manufacturer Boeing Co. announced on Tuesday it has signed an agreement with Iran Air “expressing the airline’s intent” to purchase airplanes in a deal that could be worth up to $25 billion, The Times of Israel reported.

According to The Times of Israel, Iran Air, the country’s national carrier, said Monday it wanted to buy a large quantity of the Boeing 737s and 777s from the Chicago-based manufacturer. The 737 is a small jet usually used for shorter flights lasting a maximum of five hours. The 777 is a larger plane that can carry up to 450 passengers on a journey lasting at least 12 hours or more.

Ali Abedzadeh, the head of Iran’s Civil Aviation Organization, was quoted by the state-run IRAN newspaper as saying the recent sale could involve 100 Boeing aircrafts, though the manufacturer has declined to discuss this.

Rear Admiral John Kirby, Spokesperson for the U.S. Department of State as of 2015. (Photo: U.S. Department of State)
Rear Admiral John Kirby, Spokesperson for the U.S. Department of State as of 2015. (Photo: U.S. Department of State)

Aware of the implications of the pending agreement with an openly hostile entity as well as any unexpected consequences that may occur, especially in light of the Iranian nuclear deal which was reached last year, Boeing has been cautious about entering Iran’s market economy. According to The Times of Israel, American officials had said the sale would require U.S. Treasury clearance as recently as last weekend. Something had evidently changed to cause the companies to move ahead with the agreement, but it’s unclear exactly what.

Taking valid concerns into account, the company issued a statement to The Associated Press that it signed the Iran Air deal “under authorizations from the US government following a determination that Iran had met its obligations under the nuclear accord reached last summer.”

“Boeing will continue to follow the lead of the US government with regards to working with Iran’s airlines, and any and all contracts with Iran’s airlines will be contingent upon U.S. government approval,” it said. The company’s statement offered no further details. A Dubai-based Boeing spokesman, Fakher Daghestani, declined to elaborate.

State Department spokesman John Kirby said, “The State Department welcomes Boeing’s announcement of this deal with Iran Air,” because it involves the form of “permissible business activity envisioned in the Joint Comprehensive Plan of Action.” The JCPOA “provides an opening for civil aviation companies, including American companies, to pursue legitimate commerce with Iran, and we note reports of progress in the aviation sector, which is good for both the economy and for public safety,” Kirby added.

When asked for a comment on Boeing’s statement that the Iran Air agreement was indeed signed with U.S. government authorization, a spokesperson for the Treasury Department said, “We do not comment about engagement with specific private entities. This is a policy across all of our sanctions programs. It is not specific to our Iran sanctions program.”

If the Boeing-Iran Air agreement goes through, the first plane could arrive in Iran in October.

The imminent arrangement between Iran Air and Boeing is not the first in the country’s evident attempt to build up its aircraft carrier collection. In January, ahead of the release of billions of dollars in sanctions after the nuclear accord was signed, Iran entered talks with the company Airbus, Boeing’s European equivalent, to purchase 114 civil aircrafts from the manufacturer, a deal worth over $7 billion.

Iran also recently ordered 20 airplanes from French-Italian aircraft manufacturer ATR.

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