Iran Close to Deal for Boeing Jets -- WSJ
June 16 2016 - 3:03AM
Dow Jones News
By Jon Ostrower and Robert Wall
Iran and its airlines are nearing a tentative agreement to buy
about 100 Boeing Co. jets following the easing of trade sanctions,
according to people briefed on the discussions.
The Islamic Republic is expected to buy jets directly from the
U.S. plane maker in what would be one of the highest-profile deals
between a U.S. company and Tehran since the West lifted nuclear
sanctions on the country in January. It could also lease
Boeing-made aircraft as part of a broader fleet renewal effort that
includes acquiring Airbus Group SE planes, according to one of the
people briefed on the discussions.
The country's airlines have indicated a dire need for both
medium-haul jets like Boeing's single-aisle 737 as well as its
long-range 777 and 787 Dreamliners.
Any announcement between Iran's airlines and Boeing isn't
finalized, requiring additional U.S. government approval to
complete a purchase agreement.
Boeing declined to comment on details of its talks with Iran on
Wednesday and said it was up to Iran and its airlines to announce
any agreement. A spokeswoman for the Treasury Department, which
grants the licenses, declined to comment.
The Chicago-based aerospace giant has moved slowly as it tests
the newly eased commercial restrictions in Iran, following the Iran
government's agreement dismantle its nuclear program.
A preliminary deal is a key test for western companies looking
to do business in Iran, and any tentative agreement will move to a
crucial phase that will demonstrate whether the Islamic Republic's
airlines can tap dollar-based financing sources to buy large
durable goods like Boeing's jetliners.
Iranian Transport Minister Abbas Akhoundi said Tuesday the
country was close to a deal with Boeing, according to the
semiofficial Mehr News Agency. "In the coming days, details of the
agreement with this company will be announced," he said, without
elaborating further.
IranAir Chief Executive Farhad Parvaresh this month said he was
had two rounds of talks with Boeing. He noted that western banks
continue to be leery about doing deals in Iran, which has
complicated completing deals for plane purchases.
The d iscussions began in April , enabled by a preliminary
license from the U.S. government that allows it to conduct direct
talks with approved carriers.
At the time Boeing said its representatives "discussed the
capabilities of its commercial passenger airplanes and aftermarket
services with Iranian airlines approved by the U.S. government,"
according to a Boeing spokesman.
At an investor event this month, Boeing Chief Executive Dennis
Muilenburg said, "The way the licensing process works now is we're
allowed to now put together tentative sales agreements. Those sales
agreements would then be each individually subject to U.S.
government approval."
Airbus Group SE in January announced an agreement with Iran to
purchase 118 new jets, underscoring Iran's interest in restoring
commercial links with Europe, as well as the urgency for new
commercial aircraft. The deal hasn't been finalized because of
concerns in the financial community about doing deals in Iran.
Airbus also is still waiting for an export license from the U.S.
government for the planes.
Airbus commercial airplane boss Fabrice Brégier recently said
the company was making progress securing the export license, but
more work was needed. He remained optimistic the deal, which would
include Iran's purchase of 12 A380 superjumbos, could be finalized
this year.
Write to Jon Ostrower at jon.ostrower@wsj.com and Robert Wall at
robert.wall@wsj.com
(END) Dow Jones Newswires
June 16, 2016 02:48 ET (06:48 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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