companies

Boeing, Airbus to lose deals with Trump’s Iran sanctions

Both planemakers will lose contracts worth roughly $39b in combined orders for nearly 200 commercial aircraft

By Steven Mufson and Damian Paletta, Washington Post
15:03 May 9, 2018
BUS_180905 Iran Air

Washington: Boeing and Airbus will lose contracts worth roughly $39 billion (Dh143.2 billion) to replenish Iran’s ageing fleet of commercial planes as part of the Trump administration’s reimposition of sanctions.

“The Boeing and Airbus licences will be revoked,” Treasury Secretary Steven Mnuchin told a group of reporters Tuesday. “The existing licences will be revoked.”

The aircraft sales were among the most-sought-after contracts for Iran.

In December 2016, Airbus Group signed a deal to supply national carrier Iran Air with 100 airplanes for around $19 billion at list prices. It has delivered three planes so far, the first new aircraft acquired by Iran in 23 years.

Boeing later inked a deal with Iran Air for 80 aircraft with a list price of about $17 billion, promising deliveries would begin in 2017 and run until 2025.

The company separately struck a 30-airplane deal with Iran’s Aseman Airlines for $3 billion at list prices. No deliveries have been made yet.

In a statement, Gordon Johndroe, a Boeing vice-president, said in a statement: “We will consult with the US government on next steps. As we have throughout this process, we’ll continue to follow the US government’s lead.”

Analysts said the impact on Boeing would be modest thanks to a backlog of orders for 737 aircraft. Boeing’s stock fell 0.6 per cent and closed at $338.37 a share.

Airbus, based in Toulouse, France, is subject to US export restrictions because more than 10 per cent of its jet parts originate with US companies such as United Technologies, Rockwell Collins and General Electric.

Mnuchin also said the Trump administration would cancel waivers that allowed the sale of commercial aircraft parts and services.

“These sanctions do impact all of the major industries,” he added. “These are very very strong sanctions; they worked last time. That’s why Iran came to the table.”

He said there might be some exclusions, but he did not elaborate.