In its biggest deal with an American company in nearly 40 years, the Iranian government signed a $16.6-billion deal on Sunday to buy new planes from Boeing.
Decades of Western sanctions against the Islamic Republic, which made it impossible for Iran to buy new planes from the world’s major producers like Chicago-based Boeing, and sometimes even spare parts, have hampered the country’s aviation industry with an aging and unreliable fleet.
But Sunday’s order of 80 jetliners from Boeing is the most visible benefit yet to the country since it signed an agreement with the US and other world powers last year which lifted severe international sanctions in exchange for Iran’s curbing of its nuclear activities. The US still enforces sanctions on Iran for activities that don’t have to do with its nuclear program.
This deal also marks the biggest commercial agreement between Iran and an American company since the 1979 revolution and US Embassy takeover. At that time Iran had already bought most of its existing 250 commercial aircraft. As of June, only 162 were still operational; the others couldn’t fly because of a shortage of spare parts.
With the lifting of US and European sanctions, Boeing and its French competitor, Airbus, got the green light to sell aircraft to Iran. Since 10 percent of Airbus plane components originate in the US, it also needed US government approval.
The deal between state-owned IranAir and Boeing is for 50 narrow-body 737 MAX aircraft and 30 long-haul 777s, including 777-300ER and the 406-seat 777-9, now under development. They will be delivered over the course of a decade, beginning next year.
IranAir also is finalizing a deal for 50 to 60 jets with Airbus, which should be completed in the next couple of days, an Iranian official said. Those are part of a larger 112 aircraft deal with Airbus, Bloomberg reports.
Iranian Transport Minister Abbas Akhoundi said Sunday at the signing ceremony that it was a "historic" day, and that the deal would create 8,000 jobs in Iran.
"The deal has a clear message for the world: we support peace and security as well as the growth of Iran based on a win-win policy," he was quoted as saying. "We hope that despite changes in the US administration, the country will remain loyal to its commitments."
His comment highlights a change in the US that could threaten the deal and last year’s sanctions-lifting agreement, as President-elect Donald Trump and some Republican lawmakers have criticized the agreement. Mr. Trump last week also criticized Boeing, announcing on Twitter Tuesday that he would cancel a contract for a new Air Force One plane with the aircraft maker because of costs that he claimed are “out of control.”
It’s unclear whether the new administration will reverse last year’s sanctions agreement with Iran, which includes Britain, France, Germany, Russia, China and the EU. But either way, Boeing’s 10-year deal would require that some US export licenses be extended during Trump's administration.
The House of Representatives, led by Republicans, last month voted to bar the selling of aircraft to Iran. If the Senate votes in favor, this could still block the Boeing deal. President Barack Obama says he will veto the bill if it reaches him before Jan. 20.
Boeing pointed out that the deal "will support tens of thousands of US jobs" linked to building the 777s alone.
This report includes material from the Associated Press and Reuters.