Iran seals deal with Boeing to buy 80 planes worth $16.6B

AP News
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Posted: Dec 11, 2016 10:59 AM
Iran seals deal with Boeing to buy 80 planes worth $16.6B

TEHRAN, Iran (AP) — Iran's flag carrier finalized a major deal with U.S. plane maker Boeing Co. to buy $16.6 billion worth of passenger planes Sunday in one of the most tangible benefits yet for the Islamic Republic from last year's landmark nuclear agreement.

Iran Air's deal for 80 jetliners is the biggest agreement Iran has struck with an American company since the 1979 revolution and U.S. Embassy takeover. It has the potential to transform Iran's creaking and accident-prone aviation industry, which has been hobbled by years of sanctions.

Those curbs have prevented the country from buying new planes from Chicago-based Boeing and European rival Airbus, and in many cases made it difficult for Iranian airlines to secure much-needed spare parts.

The deal covers 50 single-aisle 737 Max 8s, a soon-to-be-introduced version of Boeing's existing narrow-body 737 line.

It also includes 30 777s, a wide-body, twin-engine plane typically used on long-haul routes that is popular with other Persian Gulf carriers such as Dubai-based Emirates. Half of the order will cover the 777-300ER version, while the rest will be of the 777-9 model still under development.

Iran's state-run IRNA news agency said the planes would be delivered over the next decade. The first will start to arrive in 2018, Boeing said.

In September, Washington granted permission to Boeing and Toulouse, France-based Airbus to sell billions of dollars' worth of aircraft to Iran. Airbus needed U.S. approval because at least 10 percent of its planes' components are of American origin.

The U.S. and other world powers agreed last year to lift crippling sanctions on Iran in exchange for it curbing its nuclear activities. The U.S. still maintains extensive sanctions on Iran for activities unrelated to its nuclear program.

President-elect Donald Trump and several Republican lawmakers have criticized the nuclear deal, but it's unclear whether they would scrap the agreement, which was reached with Britain, France, Germany, Russia and China.

Iranian Transport Minister Abbas Akhoundi, who attended the signing ceremony, said it was a "historic" day for Iranian aviation and that the deal would create 8,000 jobs for Iranians.

"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 U.S. administration, the country will remain loyal to its commitments.

The Republican-led House of Representatives last month voted to bar commercial aircraft sales to Iran in a move that could block the Boeing deal. That legislation must still pass the Senate, where it will likely face opposition from Democrats. U.S. President Barack Obama has said he will veto the bill if it reaches his desk before he leaves office on Jan. 20.

Boeing made a point of saying it worked closely with the U.S. government throughout the deal-making process and will continue to "follow all license requirements." The Iran Air deal "will support tens of thousands of U.S. jobs" linked to the 777s alone, it said.

The plane maker said the deal value was based on list prices, though in practice customers typically negotiate discounts for bulk orders.

Most of Iran's aging fleet of 250 commercial planes was purchased before 1979, and as of June only 162 were operational, with the rest grounded because of a lack of spare parts. Iran Air, whose website lists a fleet of 43 planes, offers direct flights to over 30 international destinations, including London.

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Schreck reported from Dubai, United Arab Emirates.