Iran signs $16.6 bn deal with Boeing to buy 80 planes

The Dollar Business Bureau

Iran on Monday said it has finalised a deal of $16.8 billion with Boeing to buy 80 passenger planes, which is made possible by the landmark nuclear deal last year.

According to the state-run news agency IRNA, 50 Boeing 737s and 30 Boeing 777s aircrafts would be delivered in next 10 years. This is the biggest deal to be signed by an American firm with Iran since the 1979 revolution and takeover of the US Embassy.

In September 2016, the US granted approval to Boeing and its European counterpart Airbus for selling aircrafts to Iran worth billions of dollars. Last year, the US and other major powers of the world agreed to lift sanctions on Tehran in exchange for the country to curb its nuclear activities.

President-elect Donald Trump and various Republican policymakers have criticised the nuclear agreement with Iran, but it is not clear whether they would scrap the deal that was reached with France, Britain, Russia, Germany and China.

Transport Minister of Iran, Abbas Akhoundi, who was present at the signing ceremony, stated the deal as a ‘historic’ day for Iranian aviation industry and said that the deal would generate 8,000 jobs in Iran.

“The deal has a clear message for the world: we support peace and security as well as the growth of Iran based on a win-win policy. We hope that despite changes in the US administration, the country will remain loyal to its commitments,” he said.

Most of Iran's fleet of 250 commercial aircrafts was purchased before 1979, and as of June this year only 162 were in operating condition, with the remaining grounded due to lack of spare parts. Iran’s flag carrier airline, Iran Air website shows a fleet of 43 planes and provides direct flights to more than 30 foreign destinations, including the UK. 

It is worth mentioning that India’s 23rd procurement of Boeing 787 aircraft will be fulfilled in January 2017 while the last batch of B-787 Dreamliners are to be delivered by the American manufacturer by the end of this fiscal year. Air India had put in an order of 68 aircraft in January 2006.

Boeing has been in the news recently with the US-President elect calling for a cancellation in the order of Air Force One from the plane manufacturer for what he called, ‘ridiculous’ high costs.