Iranian Plan To Spend $2B On Russian Passenger Jets Collapses Due To U.S. Sanctions Investment
A plan for Iranian airlines to buy Russian-built passenger jets appears to have collapsed as a result of U.S. sanctions, marking a further set-back for the country's beleaguered aviation sector.
Iranian airlines have been struggling to find ways to replace their ageing fleets ever since President Donald Trump announced in May 2018 that he was going to pull the U.S. out of the Iranian nuclear deal and reimpose sanctions.
Prior to that, in the brief period when most international sanctions on Iran were lifted, the country's airlines had ordered hundreds of new planes worth tens of billions of dollars from Boeing and Airbus.
However, since U.S. sanctions were reimposed both Boeing and Airbus have had to halt deliveries – during the brief respite from sanctions only three Airbus planes were handed over and none from Boeing. The U.S. trade restrictions affect both aircraft built in the U.S. and those from anywhere else which have a significant proportion of U.S. parts in them.
As a result, Iran has been searching for other options. The idea of buying planes from Moscow-based JSC Sukhoi was first mooted in early 2018. At the time, Iranian officials suggested the Superjet-100 aircraft would not need clearance from the U.S. as it had few American parts.
However, reports from Iran now suggest that view was overly-optimistic. According to a statement by Maqsoud Asadi Samani, secretary of the Association of Iranian Airlines, a deal for Iran Air Tours to buy 20 Superjets has now been put on ice. “The arrival of the planes is out of question for now,” he told the Iranian Labor News Agency on January 1.
The sticking point is that more than 10% of the parts in the Superjets are sourced from the U.S., which means that Sukhoi requires the approval of the Office of Foreign Assets Control, the arm of the U.S. Treasury that monitors sanctions compliance, before it can sell its planes to Iran. That consent has not been forthcoming.
Aseman Airlines had also agreed to buy 20 of the Superjets, which have a list price of around $50.5m each. The two contracts were worth a little over $2bn in total.
The Superjet-100 would, in any case, only have met part of the fleet requirements of Iran’s airlines, given its limited size. It can carry up to 98 passengers, meaning it is not an alternative to the larger jets from Airbus and Boeing.
The latest set-back means Iranian aviation officials will have to go back to the drawing board as they look for ways to refresh their fleets. The country is estimated to require as many as 500 new aircraft, but with most of the world’s major manufacturers essentially out of reach, it has few options. Officials have reportedly been considering buying planes from Ukraine’s Antonov although its range of aircraft are, like the Sukhoi jet, also limited in size.
source: Forbes Media LLC