US Unlikely to Permit Airframers to Support Iran-Owned Aircraft

EghtesadOnline: A top US official said the US government is unlikely to issue any licenses that would allow companies like Airbus and ATR to continue supporting aircraft in service with Iranian airlines.

News ID: ۷۸۳۲۶۶

14 July 2018

The official likewise added that the US government is unlikely to approve a new request by ATR to sell more turboprops to Iranian carriers.

Those companies recently delivered aircraft to Iran Air, but their ability to support the aircraft remains uncertain due to the US government’s recent harder stance toward Iran, FlightGlobal reported.

Under Donald Trump, the US is ending participation in the Iran nuclear deal and revoking licenses (made possible by the deal) that enabled aircraft manufacturers to sell aircraft and aircraft components that contain US-made parts to Iranian airlines, Financial Tribune reported.

Aircraft manufacturers have to “obtain licenses from us” to fully support aircraft delivered to Iranian airlines, US Department of Treasury assistant secretary of terrorist financing, Marshall Billingslea, said.

“At this stage, I think we are not in a position to suggest we would be issuing such licenses,” he said.

Billingslea also suggests the US is unlikely to approve a more-recent application by ATR for permission to sell more turboprops to Iranian airlines.

“We are not in a position to show flexibility on transactions with Iran at this time,” he said.

Neither Airbus nor ATR immediately responded to requests for comment.

US-Iranian economic relations had experienced a détente following the nuclear deal, which the US, Iran and five other countries signed in 2015.

Following the agreement, which aimed to limit the scope of Iran’s nuclear program in exchange for lifting of sanctions, the US agreed to issue licenses to permit aircraft manufacturers to sell aircraft and aircraft parts to Iranian airlines.

Those licenses paved the way for several aircraft sales to Iran Air in 2016 and 2017. The carrier signed deals to buy at least 20 ATR turboprops, some 100 Airbus jets and 80 Boeing aircraft. Other Iranian airlines likewise expressed interest in new western jets.

But Trump announced on May 8 the US would cease participation in the agreement by August 6 and would revoke aircraft-sale licenses.

Since revoking those licenses, the US has seen a “surge in surreptitious purchasing by Iranians of spare parts”, he said.

Between when the Iran deal took effect and when Trump announced the US reversal, ATR delivered eight ATR 72-600s to Iran Air and Airbus handed over three to the carrier.

Boeing did not deliver any aircraft, data show.

Billingslea’s comments came after ATR urged the Trump administration to unblock the export of its 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.

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.

He told Reuters that 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”.

Asghar Fakhrieh-Kashan, a senior advisor to Iran’s roads and urban development minister, has said money for six of the aircraft in question is ready to be paid.

“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.

Fakhrieh-Kashan did not explain the Roads Ministry’s refusal to make down payments in the past, which led to the delay in aircraft delivery by Boeing and Airbus.

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 buyers may be complicated by the fact that ATRs built for Iran contain features that 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.