EghtesadOnline: Franco-Italian planemaker ATR is ready to deliver a number of airplanes to Iran Air before the US sanctions’ revival in August, an advisor to the minister of roads and urban development said on Monday.
Ali Asghar Fakhrieh-Kashan added that Boeing and Airbus are also expected to announce their decisions about Iran Air’s orders in a week.
“The US administration has illegally pulled out of the nuclear deal and has set a deadline for businesses to cut relations with Iran. Naturally, we are doing our best to make use of the opportunity to take delivery of more airplanes ... We will receive more aircraft if planemakers agree to deliver ahead of the schedule,” the ministry’s website quoted Fakhrieh-Kashan as saying.
Following the lifting of sanctions in January 2016, Iran Air finalized contracts for purchasing 100 Airbus jets, 80 Boeing jets and 20+20 ATR aircraft. It has taken delivery of 11 planes so far: One Airbus A321, two Airbus A330s and eight ATR 72-600s, Financial Tribune reported.
Following US President Donald Trump’s announcement over Washington's exit from the nuclear deal, the treasury’s Office for Foreign Assets Control said that it would revoke the license issued for selling airplanes to Iran. OFAC licenses guaranteed the sale of new airplanes to Iran Air by 2020.
According to the official, Iran Air has no problem regarding the finance of the earlier deliveries, as the lower cost of ATR turboprops allows the flag carrier to raise money from local resources.
Iran’s Bank of Mine and Industry has been tasked with financing the purchase of ATR planes. The state-owned lender has used resources of National Development Fund of Iran (Iran’s sovereign fund) for financing Iran Air’s purchases.
The flag carrier is expected to take delivery of its ninth and 10th ATR 72-600 turboprops in May. Local aviation media reported this week that the two planes are going through final checks by the Iran Air crew.
> Airbus Down Payments Ready
“Iran Air has already come up with the required down payments for purchasing jets by issuing sukuk [Islamic bonds],” Fakhrieh-Kashan said.
“We will use these resources if Airbus agrees to bring forward our deliveries.”
The Economic Council agreed earlier on March that the government issue 10 trillion rials (about $222 million) worth of bonds for purchasing new airplanes.
“The money suffices in the wake of the new measure [reimposition of US sanctions], as the planemaker naturally would not be able to deliver more than a few jets to us,” he said.
Bank of Industry and Mine was reportedly the financer of the three Airbus jets delivered to the flag carrier last year.
According to Farzaneh Sharafbafi, Iran Air’s CEO, the flag carrier was due to take deliveries of a number of jets in 2018, including Boeing 777, Airbus A320 and Airbus A321.
> Delays Logical
As per the contracts, Iran Air should have received more airplanes by now but the delivery process was prolonged.
Fakhrieh-Kashan said ensuring planemakers’ commitment to provide parts and after-sales services to Iran prolonged negotiations with foreign financiers and the uncertainty caused by Trump’s threats were key factors behind the delays.
The official added that Iran has already come up with a solution to purchase airplane parts in the future, in case the sanctions are reimposed on the Islamic Republic. He did not elaborate.
“We have no worries about purchasing parts under sanctions, considering the vast international market … We bought them in the past and will buy them in the future,” he said.
> Opportunity for Russians
The barriers raised by the US administration have turned into an opportunity for the Russian planemaker Sukhoi to make inroads into the Iran's plane market, which has been battered by years of sanctions.
Sukhoi has become the sole planemaker that can sell jets to Iran without needing OFAC license.
The Russian planemaker has managed to lower the share of US-made parts to 10%, which means that it is possible for Iranians to lease or purchase the plane without the need for any US administration licenses.
Two Iranian airlines, Iran Aseman and Iran Air Tours, have recently signed preliminary agreements for purchasing 20 SSJ100 jets each.