Boeing says it signs historic sales agreement with Iran Air

[webfact]

Boeing says it signs historic sales agreement with Iran Air
By JON GAMBRELL and NASSER KARIMI

DUBAI, United Arab Emirates (AP) — Boeing Co. said Tuesday it signed an agreement with Iran Air "expressing the airline's intent" to buy its aircraft, setting up the biggest business deal between the Islamic Republic and America since the 1979 U.S. Embassy takeover in Tehran — if it goes through.

Already, one Iranian official has said the deal could involve 100 aircraft while another has suggested Iranian airlines may purchase airplanes worth $25 billion from Chicago-based Boeing, welcome news to workers on its massive assembly plants around Seattle.

However, the long-standing enmity between the U.S. and Iran, as well as other sanctions and even presidential politics still could complicate any agreement — even after last year's nuclear deal. And even if the agreement is finalized, aircraft orders are often announced at list prices, meaning the actual price tag would likely be lower as airlines typically get steep discounts.

Boeing issued a statement to The Associated Press saying that it signed the Iran Air agreement "under authorizations from the U.S. 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 U.S. 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.

Boeing's statement offered no further details. Fakher Daghestani, a Dubai-based spokesman for the manufacturer, declined to elaborate.

State Department spokesman John Kirby said, "The State Department welcomes Boeing's announcement of this deal with Iran Air, which involves the type of permissible business activity envisioned in the Joint Comprehensive Plan of Action. Boeing has been in close contact with the State Department regarding this deal. We committed, as you know, to license sales of civil passenger aircraft and will continue to implement this in all of our JCPOA commitments."

He added that, "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 both — for both the economy and for public safety."

Asked to comment on Boeing's assertion that the company had signed the Iran Air agreement under authorizations from the U.S. government, a Treasury Department representative 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."

Iran Air, the country's national carrier, said Monday it wanted to buy new Boeing 737s and 777s. The 737s are single aisle jets, typically used for flights of up to five hours. The 777 is a larger plane that can carry passengers for 12 hours or more.

Earlier Tuesday, Iran's Transportation Minister Abbas Akhoundi said possible deals between the Islamic Republic and Boeing could be worth as much as $25 billion, on par with the country's earlier agreement with its European rival, Airbus. That deal was for 118 new planes. Iran also has ordered 20 airplanes from French-Italian aircraft manufacturer ATR.

"The initial talks were held and I can say Boeing is negotiating with the U.S. officials and possibly the amount of our purchase is equal to Airbus," Akhoundi said.

The overall size of the proposed Boeing sale to Iran, however, remains unclear. Ali Abedzadeh, the head of Iran's Civil Aviation Organization, was quoted Sunday by the state-run IRAN newspaper as saying the sale would involve 100 Boeing aircraft, something the manufacturer has declined to discuss.

If the deal goes through, he said the first Boeing plane could arrive in Iran in October.

Some analysts were skeptical that Iran will ever take delivery of so many jets.

"A $25 billion deal delivered by unicorns — flying unicorns," said Richard Aboulafia, an analyst with the Teal Group Corp. "Some planes may or may not be delivered but everyone has a huge interest in inflating the likelihood of this happening. Airbus and Boeing are desperate for a growth story and the Iranians love commercial opportunities for political leverage."

Aboulafia said the market faces too much competition from Etihad, Emirates and Qatar — the rapidly-growing airlines directly across the Persian Gulf from Iran.

Iran Air, whose website lists 43 airplanes in its fleet, has direct flights to 35 international destinations, including London. The European Union eased its restrictions on Iran Air last week.

In the past 12 months, global airlines have scheduled 150,000 flights to and from Iran, with 22.7 million available seats, according to schedule tracking service Diio Mi. It is unclear how many of those seats were actually filled. By comparison, during that same period, there were 250,000 flights to and from Poland, a country with a similar GDP but roughly half the size of the population, with 34 million available seats. The world's largest aviation market, the United States, had nearly 10 million scheduled flights.

Iranian airlines have some 60 Boeing airplanes in service, but most were purchased before the 1979 Islamic Revolution that ousted Shah Mohammad Reza Pahlavi and brought Islamists to power.

Out of Iran's 250 commercial planes, 162 are flying while the rest are grounded due to lack of spare parts, Akhoundi said Tuesday. Parts and servicing remained nearly impossible to get while the world sanctioned Iran over its contested nuclear program.

The Iranian airline with the most service was Iran Air with 4.4 million of those seats, followed by Iran Aseman Airlines with 3.1 million, ATA Airlines and Mahan Air with 2.1 million each and Qeshm Airlines with 1.8 million. The largest non-Iranian airline to serve the country was Turkish Airlines with 1.3 million seats followed by Emirates Airline with 1.1 million seats.

Boeing has been cautious about entering Iran's market as other sanctions remain in place against Tehran. American officials had said as recently as last weekend that the sale would need clearance from the U.S. Treasury.

It's unclear what changed in the last few days. It is likely Boeing may run the sale through an overseas subsidiary and use a currency other than U.S. dollars in order to avoid running afoul of American laws.

Ben Moores, an aerospace analyst with IHS, said the deal likely would need to involve leasing aircraft as well because Iran desperately needed airplanes now. He also suggested Boeing may be willing to deeply discount some of its older model 737 aircraft — meaning the $25 billion figure might be based on retail prices.

"No one's going to pay list price," he said. "I don't think it will be anywhere near the $25 billion — that's a huge order."

At the end of May, Boeing had a total of 5,762 unfilled jet orders. While exact details were not available, this deal with Iran Air would add about 100 addition planes to that backlog assuming that figure is the list price.

However, many of those orders are for the latest generation of jets that aren't yet rolling off assembly lines. Boeing has been trying to get orders for its current models to help bridge the production gap to keep its plants open.

A spokesman for the union that represents Boeing engineers and other professionals in Washington state says they continue to see job cuts despite sales announcements like the deal with Iran Air.

Forty-seven members of SPEEA, the professional aerospace union, received layoff notices just last week, according to spokesman Bill Dugovich. He said the Iran Air deal is not likely to change that.

"They factor in all these things. These deals don't come out of the blue," Dugovich said.

Included in last year's nuclear deal, which limited Iran's uranium enrichment in exchange for sanctions to be lifted, is approval for airline manufacturers to enter the Iranian market. However, American lawmakers have warned Boeing not to do business there as the Iran deal remains a hot topic in the ongoing presidential election.

At issue as well is Iran and America's long-standing suspicion of each other as the two countries haven't had direct diplomatic relations since 1979. For Americans, it is the U.S. Embassy takeover during the Islamic Revolution and its blacklisting of Iran as a state sponsor of terrorism. For Iranians, it is the American- and British-backed 1953 coup that installed the shah, as well as the U.S. Navy's 1988 downing of an Iran Air commercial jet heading to Dubai.

Since the nuclear deal, Iran also has conducted ballistic missile tests, launched rockets near U.S. warships in the Persian Gulf and briefly captured 10 American sailors. The Shiite power also has seen relations deteriorate with the Sunni kingdom of Saudi Arabia, a major U.S. regional ally.

Iran's Supreme Leader Ayatollah Ali Khamenei has expressed his continued distrust of American brands coming into the country. Comments Khamenei made in April apparently caused Iranian officials to strike models from General Motors Co.'s Chevrolet division off a list of allowed automobile brands for the Iranian market.

Khamenei also questioned purchasing aircraft in a speech June 14.

"This is a very important and necessary task, but is it a priority?" Khamenei asked, according to a transcript on his official website. "Imagine that we buy 300 airplanes. It is not clear whether this is a priority or not. This should be studied."

___

Online:

Boeing Co.: www.boeing.com

Iran Air: www.iranair.com

___

Karimi reported from Tehran, Iran. Follow him on Twitter at www.twitter.com/ncarrimi . His work can be found at http://bigstory.ap.org/content/nasser-karimi .


Associated Press writers Scott Mayerowitz in New York, Donna Gordon Blankenship in Seattle, and Bradley Klapper and Martin Crutsinger in Washington contributed to this report.


-- (c) Associated Press 2016-06-22

[ezzra]

So Iran has agreed to do business with a part of the big Satan, namely the US, and I guess all is fair

when it comes to business, never mind that Iran is the biggest terror sponsor and exporter in the world,

screw that, after all, business is business.....

[sevenhills]

So Iran has agreed to do business with a part of the big Satan, namely the US, and I guess all is fair

when it comes to business, never mind that Iran is the biggest terror sponsor and exporter in the world,

screw that, after all, business is business.....

"The biggest Terror Sponsor"....Really!

Edited June 22, 2016 by sevenhills

[williamgeorgeallen]

most of irans planes are pre 1979. more than 35 years old. defiantly time for some new ones. and for some new cars for cuba while they are at it.just finished reading a book on the hostage crisis. interesting story. capitalism and trade between counties can help with international relations and this is a good example.

[ravip]

So Iran has agreed to do business with a part of the big Satan, namely the US, and I guess all is fair

when it comes to business, never mind that Iran is the biggest terror sponsor and exporter in the world,

screw that, after all, business is business.....

The biggest terror sponsor Iran?

I think you might have mixed up some country names here...

Edited June 22, 2016 by ravip

[elgordo38]

So Iran has agreed to do business with a part of the big Satan, namely the US, and I guess all is fair

when it comes to business, never mind that Iran is the biggest terror sponsor and exporter in the world,

screw that, after all, business is business.....

Business is business is the world wide trade mantra. The working man through these trade deals/lifting of sanctions is sacrificing his well paid job and seeing it transferred to these countries so that these countries can be "brought up by their bootstraps" and share in the worlds prosperity (BS) so to speak. They tell us its to increase prosperity world wide but that is all BS. In this case its dance with the devil and take his cash and others are lining up to do the same. These companies promises some local production with cheap labor and poor human rights standards. Boeing wins workers loose. Its the name of game. Garner more profits sweep workers to the curb.

[Chicog]

So Iran has agreed to do business with a part of the big Satan, namely the US, and I guess all is fair

when it comes to business, never mind that Iran is the biggest terror sponsor and exporter in the world,

screw that, after all, business is business.....

Business is business is the world wide trade mantra. The working man through these trade deals/lifting of sanctions is sacrificing his well paid job and seeing it transferred to these countries so that these countries can be "brought up by their bootstraps" and share in the worlds prosperity (BS) so to speak. They tell us its to increase prosperity world wide but that is all BS. In this case its dance with the devil and take his cash and others are lining up to do the same. These companies promises some local production with cheap labor and poor human rights standards. Boeing wins workers loose. Its the name of game. Garner more profits sweep workers to the curb.

Where did you see that Boeing are moving aircraft production jobs to Iran?

Link please.

[mania]

So Iran has agreed to do business with a part of the big Satan, namely the US, and I guess all is fair

when it comes to business, never mind that Iran is the biggest terror sponsor and exporter in the world,

screw that, after all, business is business.....

Hey we (USA) buy crap from Israel all the time too...so why surprised?

That aside this is a good deal & will provide much needed business in a US sector other than arms selling.

Business should be like the Olympics....keep politics out of it

[Scott]

Off-topic post removed. Please stay on time.

[Sydebolle]

60+ years ago Washington (not the US) installed the Shah and his cronies to access cheap oil; a generation later the Persians wanted to have the Shah back from the US (where he was on a health vacation) to face the music on his oil deals; Washington kept him until he ultimately died in Cairo.
Persia, de facto leaderless provided the perfect vacuum to pave the way for the Ayatollah tor return from his Paris exile after 20 years; latter ransacked the US Embassy which had cost Carter the re-election. 444 days later, on Reagan's inauguration day, they were let to go; the movie Argo covers the history (very pro-Washington and incorrectly, as it was mainly the Canadian and British services and not the CIA to be entitled for claiming merits).
The Washington then provided Iraqi madman Saddam Hussein with whatever he needed to bash the meanwhile renamed Persia called Iran now in the de facto American war they conveniently called Irak-Iran war, which lasted for 8 years.
A change of power, the Ayatollah died and some other, sometimes more, sometimes less cleric enemy on the axis of evil surfaced in Tehran and the bashing by Washington continued without end.
​Nuclear threats, big talks and more threats between Washington and some mullahs operating out of their desert tent cities - a deadly combination which luckily did not escalate. In between some Israelis who tried pouring oil into the fire; good luck Netanyahu does not get on with Washington's head Obama.

And now you want to tell me, that the Americans, in an election year, changed their minds all of a sudden - after 60+ years of stirring hatred, war and human tragedy of worldwide proportions? Now everything is fine and forgotten in order to sell the fidels 100 aircraft? Wondering if any Boeing-employee lost a loved one in the desert fights against Iran and what they think about it.

While I personally have no problem with the Iranians I would strongly suggest the latter to get some quotes from Airbus in Europe or ask for some pricing in China as I find the American foreign policy completely schizophrenic and this case proves it - once more again! But maybe cash-strapped Iran inks a deal of aircraft against exclusive cheap oil - and so history would repeat itself ...........