ATR Trying to Avert “Serious Damage” Over Breakdown of Deals With Iran

EghtesadOnline: Europe’s ATR is urging the Trump administration to unblock the export of about six regional planes to Iran, warning of “serious damage” to its finances from the breakdown of deals negotiated with Washington’s approval before a change of foreign policy.

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07 July 2018

Deliveries of ATR turboprops were halted in May after the United States - which must approve exports of planes containing over 10 percent US parts - withdrew from a 2015 international nuclear deal with Iran.

Although Washington announced a 90-day wind-down period for business conducted under the accord, aircraft deliveries halted after the US Treasury said it would revoke export licenses, Reuters reported.

ATR Chief Executive Christian Scherer said the Franco-Italian company had applied for new licenses to allow some outstanding business to be completed before the August deadline and was now in discussions with the US Treasury, according to Financial Tribune.

He told Reuters ATR would argue that it had sold aircraft “in good faith” under US government licenses and that blocking the rest of the deal would cause ATR “serious damage”.

Iran Says Money Ready for 6 ATRs on Order

Asghar Fakhrieh-Kashan, senior advisor to Iran’s roads and urban development minister, said six aircraft were involved.

“The money for these planes is ready. If they can get the license from the Americans, we will pay the company for the six ATR planes,” he told Mehr News Agency.

Iran Air ordered 200 aircraft under the nuclear deal, under which most international sanctions were lifted in exchange for restrictions on Iran’s nuclear activities.

These included 20 turboprops from ATR, co-owned by Airbus and Italy’s Leonardo. Of those, eight have been delivered and the rest are in various stages of assembly.

Scherer said 6-8 aircraft would be ready for delivery by the August deadline.

The pact’s unraveling leaves ATR with up to 12 undelivered aircraft, equivalent to 15% of annual output. Planemakers try hard to avoid such “white tails” since they divert cash and delay revenues. They may also have to be resold at lower prices.

Finding alternative homes may be complicated by the fact that ATRs built for Iran contain some features which are not standard in aircraft designed for short hops, since Iran’s mountainous geography requires extra emergency oxygen supplies.

Fakhrieh-Kashan said Airbus had also applied for licenses to deliver more airplanes. It sold 100 jets to Iran and has delivered three.

“Nothing can be predicted, as we are dealing with an unpredictable person (Trump),” Fakhrieh-Kashan told Mehr.

Airbus said it would follow all regulations on Iran, but declined further comment.