Iran Reaches Deal To Acquire Boeing Planes

Iran said it has reached an agreement with Boeing for the supply of airliners, reopening the country's skies to new US aircraft for the first time in decades.

Details of the agreement were left vague, but could involve flag carrier Iran Air acquiring more than 100 Boeing jets, both directly and from leasing companies.

"In coming days details of the deal with this company will be announced," Roads and Urban Development Minister Abbas Akhoundi said, according to the semi-official Mehr news agency.

The agreement is so far only a broad outline of what a formal deal would look like once Boeing has the necessary US government approvals to sell planes to Iran.

So far, Boeing has only been granted permission to present its products to Iran Air and a handful of other airlines as it tries to catch up with Airbus, which has won a provisional deal for 118 aircraft worth USD$27 billion.

"We have been engaged in discussions with Iranian airlines approved by the US government about potential purchases of Boeing commercial passenger planes and services," a Boeing spokesman 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. Any agreements reached will be contingent on US government approval."

HURDLES REMAIN

Iran needs an estimated 400 aircraft to renew its fleet after decades of sanctions and to prepare for projected growth, according to Iranian and Western estimates.

Two senior Iranian officials said last year that Iran was expected to buy 100 aircraft from Boeing once sanctions were lifted.

Both Airbus and Boeing would need US export licenses for the deals, due to the use of significant US technology in all modern airliners.

Even then, industry sources caution that both deals could take some time to implement because of uncertainty over financing, with the US financial system still closed to Iran.

The Airbus deal is priced in euros instead of dollars, the currency usually by plane makers, but many banks remain reluctant to finance it because they fear losing their claim to the underlying assets if sanctions are re-introduced, bankers say.

Singapore-based leasing company BOC Aviation, in which Boeing recently invested as part of its stock market debut, is reported to be in discussions with Boeing about financing part of the deal.

US Secretary of State John Kerry said in April Washington was not against foreign banks doing business with Iran under the nuclear deal, but Iranian Supreme Leader Ayatollah Ali Khamenei has accused Washington of not being committed to the accord.