The Forum for Partners in Iran's Marketplace

September 2017, No. 85


Aseman Airlines Signs Deal to
Buy at Least 30 Boeing Jets

Washington granted permission to Boeing and its European competitor Airbus to sell billions of dollars’ worth of aircraft to Iran.

Iran’s Aseman Airlines has signed a tentative deal to buy at least 30 Boeing 737 MAX jets, in the first new business with the US plane maker since President Donald Trump took office vowing to take a tougher stance toward Iran.

Owned by Iran’s Civil Servants Pension Organization but managed as a private company, Aseman is Iran’s third-largest airline by active fleet size.

Iran’s official Islamic Republic News Agency said representatives of Aseman and Boeing had signed an agreement in Tehran covering as many as 60 jets, after a year of negotiations.

Aseman’s Managing Director Hossein A’laei and Boeing Sales representative in the Middle East and Russia James Larson signed the final contract (June 10) after one year of negotiations between the US aerospace giant and Iran’s third-largest carrier.

Boeing described the deal as a “memorandum of agreement,” meaning it is only outline for the time being and subject to government approvals. It covers plans for Aseman to buy 30 aircraft with options for a further 30, it added.

If completed, the main part of the deal for 30 jets would be worth $3.4 billion at list prices, though airlines typically pay around half that.

This is the second deal between the Chicago-based Boeing and an Iranian airliner since a landmark nuclear agreement between Iran and world powers went into practice in 2016.

In December, Iran Air, the country’s flag carrier, finalized a $16.6 billion deal with Boeing to purchase 80 passenger planes.

In September, Washington granted permission to Boeing and its European competitor Airbus to sell billions of dollars’ worth of aircraft to Iran.

Trump has said he opposes the nuclear sanctions pact, but has not stated a public view on the aircraft deals reached under the accord. Meanwhile, the US aerospace industry says would support his agenda for protecting US manufacturing jobs.

In a statement on the Aseman deal, Boeing cited US Department of Commerce data suggesting an “aerospace sale of this magnitude creates or sustains approximately 18,000 jobs in the United States”.

Boeing deliveries to Aseman would start in 2022, although the US plane maker must first apply for licenses from the US Treasury allowing it to proceed with the sale.

“Boeing continues 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 are contingent upon US government approval,” the Boeing statement said.

The Boeing sale must be cleared by the US Office of Foreign Assets (OFAC).

“We have finalized the deal and now we are waiting for OFAC permission within the next month,” Aseman spokesman Amir Reza Mostafavi said.

He said Aseman would pay five percent of the contract in cash, with the remainder paid through a financing deal organized by Boeing.

In December, the European Union banned Aseman from flying to the EU due to safety concerns, highlighting gaps in Iran’s ageing fleet following decades of sanctions.

Semi-Government Agencies

While Aseman operates as a private company, Iran’s Minister of Cooperative, Labor and Social Welfare Ali Rabiei and Head of Civil Aviation Organization Ali Abedzadeh attended the signing ceremony.

Rabiei is the chairman of Board of Trustees of the Civil Servants Pension Organization.

Aseman Airliner was ceded to the Civil Servants Pension Organization in 2002 and is therefore considered a semi-government company.

Commenting on the status of Aseman Airlines, Rabiei said it was becoming more and more stable every day. “In 2013/14 the company had eight planes in its possession but today it has 21 planes,” said the minister, adding that figures show that Aseman has the highest number of flights in the country. He also noted that the airline intends to improve its services in the future.


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  September 2017
No. 85