HomeMiddle EastIran Said to Have Deal With Boeing to Buy Passenger Planes

Iran Said to Have Deal With Boeing to Buy Passenger Planes

Iran has reached an agreement with the Boeing Company for the acquisition of new passenger planes to help modernize its outdated fleet, state-run Iranian news media reported on Tuesday.

Such an agreement, if completed, would potentially be worth many billions of dollars to Boeing and amount to the most prominent commercial transaction between an American company and Iran since sanctions linked to Iran’s nuclear program were lifted six months ago. It also would send a strong signal that Iran and the United States, despite decades of antipathy, might be moving toward normalized ties.

Numerous obstacles remain to such an agreement, most notably other American sanctions on Iran that are not related to the Tehran’s nuclear program, including a ban on using dollars in trade with the country. The restraints have dissuaded many international banks and financial companies, fearful of running afoul of American laws, from venturing into the Iranian market.

Many Republican lawmakers and others who opposed the nuclear agreement, and who have long warned of any reconciliation with Iran, could object to a Boeing deal.

Also unclear is whether Iran’s supreme leader, Ayatollah Ali Khamenei, who often describes the United States as his country’s most dangerous threat, would countenance such an agreement.

Nonetheless, Boeing, with the United States government’s permission, has been in discussions for months with Iranian aviation officials about their dire needs for new airplanes.

Iranian officials have said they will need to acquire at least 400 planes in coming years to replace their commercial fleet, one of the world’s oldest. It includes some Boeing models that predate the 1979 Islamic revolution that overthrew the American-backed shah.

Iran’s minister of roads and urban development, Abbas Akhoundi, was quoted by Iranian news agencies on Tuesday as saying that a deal with Boeing had been completed and that details would be “announced within the next few days.”

Asked about Mr. Akhoundi’s assertion, a spokesman for Boeing at the company’s Chicago headquarters, John Dern, did not deny it.

In an emailed response, Mr. Dern said, “We do not discuss details of ongoing conversations we are having with customers, and our standard practice is to let customers announce any agreements that are reached.”

Mr. Dern’s statement also cautioned: “Any agreements reached will be contingent on U.S. government approval.”

Boeing’s most important foreign competitor, Airbus, announced a deal worth roughly $27 billion in January to sell Iran 118 aircraft. There has been speculation that Boeing has been negotiating a similar transaction involving roughly 100 planes.

But the Airbus agreement has not been completed, partly because it also requires United States regulatory approval since a significant portion of Airbus plane components are American.

Asked about the status of the Airbus deal, a spokesman, Justin Dubon, said in an emailed response, “As with any agreement, it takes some time to finalize.”

Some American critics of Iran expressed skepticism about the Iranian reports of a Boeing deal, describing them as an exaggeration and part of what they called Iran’s attempts to portray itself as a legitimate economic partner.

“These deals are more aspirational than a reality,” said Mark Dubowitz, executive director of the Foundation for Defense of Democracies, a Washington-based group that is highly critical of Iran.

Mr. Dubowitz said aircraft deals with Iran were tricky in part because some areas of the country’s civilian aviation industry were controlled by Iranian businesses linked to the Islamic Revolutionary Guards Corps, which remain subject to American sanctions.

“It’s a due-diligence nightmare,” he said, “not just for the companies but for the banks that finance the deals.”

At the same time, Mr. Dubowitz and others also noted that President Hassan Rouhani of Iran, an architect of the nuclear agreement, will be up for re-election next year and needs to show that the agreement has been economically beneficial.

Under that agreement, completed in January with the United States and other world powers, many economic restraints on Iran were rescinded or relaxed in exchange for verifiable guarantees by Iran that it is engaged in only peaceful atomic work.

Mr. Rouhani’s promised benefits, however, have been slow in coming. Iranian officials have complained that nonnuclear American sanctions remain a major impediment, dissuading many foreign companies from investing in and trading with Iran.

“The Boeing deal would be really important,” said Cliff Kupchan, chairman of the Eurasia Group, a Washington-based political risk consulting company.

Proponents of the nuclear deal, Mr. Kupchan said, have been wagering that it will help Iran evolve in a direction less hostile to the United States and other Western powers.

“For that, Iranian elites have to know that the U.S. wants constructive interaction,” he said. “If Boeing sells 100 planes to Iran, it would send exactly the right vibe.”

United Against Nuclear Iran, a New-York based advocacy organization, has claimed some responsibility for Iran’s frustration, through a campaign that warns companies that they could risk incurring American legal problems by engaging in business with Iranian entities.

The organization claimed responsibility for the cancellation of an international forum on opportunities in Iran’s natural gas industry that had been scheduled for Thursday and Friday in Barcelona, Spain.

Anthony Bright, operations manager for INconnect, a Czech company that had organized the forum, said in an emailed statement that it had been postponed until December. Mr. Bright did not provide a reason.

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(via NY Times)