Sunday, June 11, 2017

Boeing’s Sale of Up to 60 Commercial Jets to Iran Takes Next Step: Transaction still requires U.S. government approval; Boeing says it would help sustain 18,000 jobs



The Wall Street Journal
By Robert Wall
June 10, 2017 4:56 p.m. ET


LONDON— Boeing Co. said Saturday it had moved a step closer to completing a contentious jetliner sale to an Iranian airline, though the U.S. government still needs to give the green light before planes could be delivered.

Boeing said it had signed a final purchase agreement with Iran Aseman Airlines for up to 60 737 Max single-aisle planes, its newest model. The two parties earlier this year announced a memorandum of agreement for the transaction that could be valued at up to $6 billion at list price, though buyers typically get discounts.

Boeing, the world’s No. 1 plane maker, and European rival Airbus SE have signed multibillion-dollar deals with Iranian carriers to sell planes after foreign powers lifted many economic sanctions last year in exchange for restrictions on Tehran’s nuclear program. Iran has a fleet of aging planes after years of sanctions.

Even as European countries have rushed to Iran to establish business ties after nuclear sanctions were lifted, U.S. companies have largely held back, unsure about whether President Donald Trump —a sharp critic of the nuclear deal on the campaign trail—would try to alter the pact or otherwise discourage closer business ties.

Congressional critics of easing ties with Iran have opposed the plane sales and sought ways to stop the deals. They accuse Iran of using planes to help support terrorism, an accusation Tehran denies.

Airbus and European turboprop maker ATR this year started delivering airliners to Iran Air, the country’s flag carrier. Airbus last year agreed to sell 100 planes to the state-owned airline. Boeing last year also won a $16.6 billion deal before discounts to sell 80 planes to Iran Air. It is awaiting final approval from the U.S. Treasury for those sales.

When Boeing announced the agreement with Aseman Air in April, it was the first major deal put forward between a U.S. company and an Iranian one since Mr. Trump took office.

Boeing Saturday said it had applied to the U.S. Treasury Department’s Office of Foreign Assets Control for approval of a license to see the deal through. Plane deliveries wouldn’t start until 2022.

Boeing has emphasized the job-creating potential of the order. The sale would help sustain 18,000 jobs, it said.

Still, in a sign of the political sensitivity of deals with Iran, the Chicago-based company stressed it “continues to follow the lead of the U.S. government with regards to working with Iran’s airlines, and any and all contracts with Iran’s airlines are contingent upon U.S. government approval.”

—Asa Fitch contributed to this article.

Original article can be found here:  https://www.wsj.com

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