Daily Management Review

$25 Billion Deal Signed Between Airbus and Iran for Supply of 118 Planes


$25 Billion Deal Signed Between Airbus and Iran for Supply of 118 Planes
Airbus would supply 118 plans to Iran. The European airplane manufacturing company signed a deal to this effect worth $25bn (€22bn) at list prices.
This is being tipped as the biggest deals signed since Western sanctions against Tehran were lifted.
The deal was signed between the European multinational and Iranian government during a visit by Iranian President Hassan Rouhani to France.
The order for the airplanes to Airbus included 73 wide body and 45 narrow body jets, including 12 A380 superjumbos.
This deal with Iran is viewed as one that would significantly boost the business of Airbus.
Airbus has made several petitions unsuccessfully to try and convince the global airlines to order the world's biggest passenger aircraft in the past two years.

It was about more than a decade that the first A380 had taken to the air had Airbus managed to break even on the A380 program which happened only last year.
However there is a slight catch in the company completing the order. More than 10% of the parts for the planes are made in the United States and the huge deal will depend on Airbus winning US export licences.
Talking about the deal with Iran, Airbus said that the agreement would include the company training pilots, managing airport operations and providing management support for air traffic management.
The company would also depend on UK to complete the order as the order for aircraft wings for Airbus planes like the A320 are made in Broughton, north Wales.
Iran is also interested in buying planes from Boeing, Airbus's arch rival.
In the next five years, it is estimated that Iran would require 400 medium- and long-range planes, and 100 short-haul jets, said the country’s transport minister Abbas Akhoundi.  
Western manufacturers were prevented from selling equipment and spare parts to Iranian companies due to an embargo that was imposed for the same in 1995 by Western powers.
Many of the aircraft in the Iranian airline fleet require to be replaced and retired as the average age of the nearly 140 planes is 20 years.
Meanwhile, three weekly flights to London and two to Paris and Amsterdam respectively were announced by flag carrier Iran Air.
Direct fights to the US, which were ended more than 30 years ago, is being considered for resumption by Iran Air.
The thousands of Iranians among about one million who live in the US and who have to fly home every year are forced to change in London, Amsterdam, Frankfurt, Istanbul or Dubai.
"Today's announcement is a first step towards restoring the prestige of the civil aviation sector in the region, and alongside partners such as Airbus we will offer unparalleled services," Iran Air chief executive Farhad Parvaresh said.
Flights to Iran are being planned for resumption by several of the European airlines that include Air France-KLM.
Following the lifting of the sanctions by the wets on the country, many European companies are queuing up to strike deals with Iran and enter the Iranian market.

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