What is in this article?:
- Boeing Co. is Finally Open for Business in Iran
- 78 Million Consumers
Boeing faces risks and uncertain rewards as it vies with Airbus and others to replace Iran’s museum-vintage fleet.
The U.S. government cleared the manufacturer to begin talking with approved Iranian carriers about their fleet needs, a first step toward entering the country’s resurgent aircraft market, Boeing (IW 500/12) said Friday. The plane maker will still need a separate license to complete any commercial jetliner sales.
Europe’s Airbus Group SE, which faced fewer restrictions, grabbed an early lead with a $27 billion order announced on the day nuclear sanctions were eased last month. While European aerospace rivals began scoping out potential sales last year, Boeing wasn’t allowed to veer beyond safety-related items such as the aircraft maintenance manuals it sold to Iran Air Tours.
Boeing had been a notable no-show as the country’s aviation market re-opened, skipping a January aviation gathering in Tehran and causing Iran Air Chairman Farhad Parvaresh to suggest that the company was “lagging behind a bit.” The planemaker said it was following a licensing process outlined by the U.S. government.
“We understand that the situation in the region is complicated and ever changing and we will continue to follow the U.S. government’s guidance,” Boeing said on February 19.
Boeing faces risks and uncertain rewards as it vies with Airbus and others to replace Iran’s museum-vintage fleet. There’s the prospect of political backlash, given the Iranian leaders’ penchant for anti-U.S. and anti-Israeli rhetoric. Boeing also may need to leave wiggle room to back out of any deals for potential orders if the next U.S. president decides to reinstate sanctions.
“Selling to Iran is a lot different than selling to Dubai,” says Loren Thompson, aerospace analyst at the Lexington Institute. “They may be in the same part of the world, but the leaders in Tehran are very controversial in Washington.”
The potential demand left untapped after Airbus’s 118-plane bonanza isn’t clear. While Iranian leaders have spoken of a need for hundreds of jets, aviation consultant Ascend Worldwide sees an “initial replacement opportunity equivalent” to the 160 aircraft currently in service in Iran, said Rob Morris, head of the consultancy.
“Assuming that the thaw does indeed continue, the potential opportunity may be significantly greater than this though,” Morris said in an e-mail.
One measure of the potential is Turkey, Iran’s similar-size neighbor with a vastly more developed tourism industry, he said. Turkey has 450 commercial jets in service and more than 320 more planes on firm order. Over a decade, that fleet may grow to about 650 planes, Morris said.