Iran’s Airbus Deals Clouded by Doubts

EghtesadOnline: Iran warned on Wednesday that its multibillion dollar deals for Airbus planes had been thrown into doubt by US President Donald Trump's attacks on the nuclear deal.

News ID: ۷۸۱۳۶۴

21 January 2018

"Considering Mr. Trump's stance on pulling out of the Joint Comprehensive Plan of Action (nuclear deal), we must make sure that the licenses will remain valid … regardless of any decision taken by US," deputy minister of roads and urban development, Asghar Fakhrieh-Kashan, told ILNA.

"As long as uncertainties are not resolved, we will not provide down payments," he was quoted as saying by AFP.

"Because of these negotiations, there can be delays in payments."

His comments came a few days after Airbus sales chief, John Leahy, told Reuters in an interview that financing is the main issue facing Iran's deal with the European planemaker, indicating that Airbus would be cautious about building jets for Iran without receiving deposit payments, according to Financial Tribune.

“You have got to make pre-delivery payments where aircraft get into production, so we are doing it on perhaps a lower basis than we thought, but we still believe that it will work out,” Leahy said.

Nonetheless, the Airbus executive remained positive that the deal would get through but warned the transactions could take longer to complete than planned.

“I think those deals will get fulfilled, maybe not on the original schedule.”

A specific clause in the 2015 nuclear deal–which lifted some international sanctions in exchange for imposition of limits to the scope of Iran's nuclear program–opened the way for Iran to purchase planes from international suppliers.

As Fakhrieh-Kashan has put it, any attempt by the US to block the sales of aircraft to Iran is tantamount to the blatant violation of JCPOA.

Licenses were granted the following year by the US Treasury's Office of Foreign Assets Control for Airbus to sell 100 planes to national carrier Iran Air, which has also ordered 80 from Boeing.

The European firm requires US export licenses because some of its parts are manufactured there.

On Friday, Trump threatened to walk away from the nuclear deal and it is unclear if this would also lead to the OFAC licenses being revoked.

"OFAC's licenses are valid until December 2020 but these licenses have been issued under JCPOA," Fakhrieh-Kashan said.

"In the most pessimistic case, if America wanted to pull out of JCPOA, then it can be expected that the executive apparatus too will obey this decision."

Asked to comment by AFP, Airbus said it "keeps on working with Iran Air and the Iranian authorities on the execution of the purchase agreement in full compliance with JCPOA and other applicable regulations."

Iran Air has so far received only three Airbus planes from its 100-plane order.