Iran has finalized a historic deal with Boeing to buy passenger planes from the US aviation manufacturer as part of an ongoing effort to upgrade the country’s civilian air fleet, Iranian media reported Tuesday.
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Carrier Iranair will purchase more than 100 Boeing jets from the manufacturer and from leasing companies, though other details of the agreement are vague, Reuters reports.
Boeing has already agreed with Iran on most of the technical and trade-related details of the deal, according to Iranian Transportation Minister Abbas Akhoundi.
Sources told Reuters that the two sides have only formulated the broad outline for what a USA government-approved deal will look like and which aircraft would be included.
Although financing arrangements are not complete, the historic agreement would likely cover deliveries and services over almost a decade at a cost of more than $17 billion. Boeing’s Middle East headquarters said it did not have any immediate comment.
A report on CNN Money went on to add, “In addition to formal government approval, the deal faces other potential stumbling blocks related to USA sanctions that remain in place following the nuclear deal stuck by Tehran and Washington in January”.
“We have been engaged in discussions with Iranian airlines approved by the [U.S. government] about potential purchases of Boeing commercial passenger airplanes and services”, the company said in an email. Iran Air operates under the umbrella of Akhoundi’s ministry.
Since worldwide sanctions over Iran’s nuclear program were lifted in January, the world’s big banks have continued to stay away because they fear being penalized by remaining United States sanctions over issues such as money laundering.
Boeing officials have been mum on Iran’s announcement, telling the Free Beacon Tuesday afternoon that it is working with Iran and the Obama administration to finalize a purchase.
Its good news for Boeing, as such a deal on completion will be worth billions of dollars.
However, numerous obstacles remain to the agreement.
Boeing still needs approval and a license from the Treasury Department.
Boeing CEO Dennis Mullenburg told investors earlier this month that Iran represented a “substantial” market opportunity, and that they hoped to carve out a 50/50 market share with Airbus, despite being several months behind on getting a deal.
But the primary US trade embargo targeting Iran remains in place. “There is a post-deal, hard-line backlash in Iran”.
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The Boeing deal is the second major deal for airplanes made by the Iran this year.
