By Tim Hepher, Parisa Hafezi and John Irish
PARIS/VIENNA (Reuters) - Western planemakers look set to reap billions of dollars in deals with Iran, if a deal is done on its nuclear program to allow one of the world's most promising aviation markets to come out of quarantine.
Iran and six world powers were struggling on Friday to remove the last obstacles to an historic deal in Vienna that could resolve a more than 12-year dispute over Tehran's nuclear ambitions, extending talks through the weekend.
For Tehran, the prospect of sweeping economic sanctions and a long-standing U.S. trade embargo being lifted represents a chance to renew a fleet whose average age of 23 years is almost twice the international average, and to do so at affordable prices, after years of paying over the odds on the black market.
For Airbus, Boeing and other manufacturers, that could mean up to $20 billion in deals, shaped in part by the negotiating positions of various camps during the lengthy nuclear talks. And for Iran Air's 38-year-old Boeing 747SP, the last of its kind, it should mean well-deserved retirement.
"There are a lot of aircraft that are really at the end of their lives," said Maximo Gainza, senior consultant at UK-based fleet watcher Ascend Flightglobal.
"Iran is going to be a very hot market as and when sanctions are lifted."
The chairman of Iran Air, Farhad Parvaresh, told Reuters last year that, as soon as sanctions were eased, Iran would seek to obtain at least 100 wide-body and short-haul jets, but that it would turn to Russia and China if nuclear talks collapsed.
Iranian and Western industry officials estimate that Iran, a country of 80 million people, will need a total of 400 aircraft in the next decade, suggesting there will be business for both major Western suppliers due to the long waiting times.
Officials cite a broad potential shopping list, from the latest Boeing 787 and Airbus A350 lightweight jets to workhorses such as the Boeing 737 and 777 or the Airbus A320 and A330 and even the most recent version of the jumbo, the Boeing 747-8, still in production but with declining sales.
BOEING BEST PLACED
Boeing appears best placed to take advantage of the first wave of sales, partly because France, which is home to Airbus and owns 11 percent of the firm, took a particularly hard line with Iran in the nuclear talks, according to industry sources, diplomats and people familiar with Iranian thinking.
Paris has become more hawkish toward Tehran in recent years as France aligns itself with Shi'ite Iran's Sunni rivals across the Gulf, Qatar and Saudi Arabia.
"The position of the French, particularly (foreign minister Laurent) Fabius, has not made things easy for Airbus," said a European aviation industry source, asking not to be identified.
Iran's transport minister last month warned France it risked missing out on $80 billion worth of business unless it changed its stance towards Tehran.
A French Senate panel recently expressed concerns that local firms were falling behind in the race to Tehran.
"Being the first one in doesn't mean you'll be the first served," responded a senior French government official. "We'll be ready. Don't worry about our firms," he told Reuters.
Iran Air's Parvaresh also told Reuters last year that Iran would give preference to suppliers who had cooperated during a window for sanctions relief that opened up in 2014.
Boeing said in October it had sold aircraft manuals, drawings, charts and data to Iran Air in its first acknowledged dealings since the 1979 hostage crisis that wrecked U.S.-Iranian relations and triggered a U.S. boycott.
The European Union does not specifically prohibit civil aviation trade with Iran but banned the export of 'dual use' technology in 2007 and has progressively tightened restrictions since then, effectively ruling out sales of civil aircraft and jet engines.
Airbus said it had applied for export licences under the scheme for temporary sanctions relief that allowed the sale of some aircraft parts, but declined to say whether any goods or services had actually been provided.
Iranian officials say numerous exchanges have been held with people representing Western aerospace firms to explore future deals, including meetings in several European cities.
Two senior Iranian officials said it was already understood that Iran would buy 100 planes from Boeing once sanctions are lifted, but U.S. industry officials deny any informal deals or commercial discussions.
"It's certainly an opportunity. We sold a lot of planes there before, and that fleet is really old. But until our government says it’s OK, we’re staying on the sidelines," Boeing Commercial Airplanes CEO Ray Conner told Reuters in Washington this week.
Some industry analysts urge caution in projecting the number of planes Iran's airline industry will eventually order, noting that, to sustain a large fleet, it also needs to develop profitable passenger business - by opening up the domestic market and building up an attractive international hub.
"They have to deregulate the economy before you see the kind of numbers you would associate with a country of its potential," said Richard Aboulafia of Virginia-based Teal Group.
There are plans to loosen regulated domestic fares, but traffic on some foreign routes may already have been lost permanently to regional rivals such as Emirates, he said.
In the long term, Iran has strategic ambitions to rival Gulf cities as a hub attracting traffic from Western Europe and North America to the Asia-Pacific region. But getting a new fleet of aircraft flying quickly may need more than a lifting of sanctions.
After a boom in airplane demand, the major Western manufacturers are sold out for most of the rest of the decade.
Experts say Iran may have to resort to the second-hand market or lease planes to get started. But leasing firms will want to clarify thorny issues such as jurisdiction that have gathered dust during its enforced absence from the market.
"There is not much choice because of the way production lines are sold out," said Tony Whitty, CEO of UK-based aircraft trading company Cabot Aviation. "In the short term, if you go to Airbus and Boeing, you have got to wait three or four years."
In the interim, that could mean leasing, or buying second-hand, outmoded four-engined models such as less recent versions of the Boeing 747, or the out-of-production Airbus A340. Though less popular than newer twin-jets, experts say such planes are easily available at bargain prices and would still offer fuel savings for Iranian carriers.
(Additional reporting by Andrea Shalal, Victoria Bryan; Editing by Kevin Liffey)