Iranian President Hassan Rouhani has signed a deal with Airbus to buy 118 airplanes. The deal, which amounts to a staggering $25bn, is one of the biggest deals signed by Theran ever since Western sanctions were lifted decades ago.
The deal was signed during the Iranian president’s visit to France, and the order included 73 wide body and 45 narrow body jets, and 12 A380 superjumbo jets.
Airbus’ Biggest Deal Yet
Airbus didn’t hide the fact that they have been struggling to convince airlines around the world to buy the A380, and Iran’s decision to order 12 of these superjumbos is a significant boost to the European Consortium.
To understand how crucial this deal with Iran is, Airbus only recently broke even on the A380 program last year, nearly a decade after the first superjumbo jets took flight.
While this is undoubtedly Airbus’ biggest deal yet, the deal will still depend if the pane company will win US export licenses. Around 10% of the parts of the superjumbo jets are made in the United States. The United Kingdom will also benefit from the monumental order, as the wings of all the Airbus planes are made in Broughton, North Wales.
Airbus explained that part of the deal also includes the training of pilots, airport operations, and air traffic management.
Tehran’s Transport Minister, Abbas Akhoundi estimates that his country will need over 400 medium to long-range planes, and over 100 short-haul jets in the coming years. Iran is also eyeing Boeing, Airbus’ main rival in the aviation industry, as part of their leap forward in terms of aviation.
The deal will address Iran’s aging aviation industry. Currently, Iranian airlines have around 140 planes, but these are over 20 years old now, with many needing major repair or, at worst, are ready to retire.
The 1995 embargo to the country initiated by the US is what led to the current status of Iran’s airlines. The embargo, among other things, prevented western manufacturers from selling equipment and spare parts to Iranian companies.
Resuming Direct Flights?
Iran Air currently has three weekly flights to London, and two to Paris and Amsterdam. The deal signed by the Iranian President means that the country is again considering resuming direct flights to the United States, which ended roughly thirty years ago.
This will no doubt be great news for the one million Iranians living in the US, who are forced to change airlines in London, Amsterdam and Frankfurt, and even farther to Istanbul and Dubai. If the direct flights will resume, travelling back home will be easier.
Air France-KLM and several European airlines are also planning to resume flights to Iran.
While the future of direct flights from the US to Iran are, as of yet, unsure, the $25bn deal looks like it will be the first among many that Iran will sign now that the sanctions have been lifted.