Iran has Reached a Big Purchasing Deal with Boeing

According to the announcement that came from Abbas Akhoundi, the Iranian minister of roads and urban development, yesterday, Iran has it’s reached a deal to buy passenger aircraft from U.S. plane maker Boeing. In addition, reports by Iranian news agencies indicated that more details on the agreement would be announced in the next few days.

This deal would help Iran modernize an aircraft fleet that is among the oldest and most dangerous in the world. After years of sanctions, the country is now in desperate need of hundreds of new aircraft.

On the other hand, if the deal goes through, would be the first major contract between a U.S. company and Iran since nuclear-related sanctions on the country were lifted earlier this year. Even Akhoundi himself described the Boeing deal as a potential “new milestone” in the country’s efforts to rejoin global aviation networks.

This deal faces a lot of pressure at the very beginning, among which government approval is the most obvious one.

“Our standard practice is to let customers announce any agreements that are reached,” the plane maker said. It cautioned that any deals would be “contingent on U.S. government approval.”

In addition to the formal government approval, the deal faces other potential stumbling blocks related to U.S. sanctions that remain in place following the nuclear deal stuck by Tehran and Washington in January. Sanctions covering military technology, terrorism and human rights all remain in force. Together, they affect a wide range of industries, including aviation.

Although that accord eased financial and oil-related sanctions and allowed for the case-by-case sale of commercial passenger aircraft and parts to Iran, the primary U.S. trade embargo targeting Iran remains in place, prohibiting U.S. citizens from investing directly in Iran, and denies Iranian banks the ability to clear U.S. dollars through New York or do business with American financial institutions.

On top of all that upon Iran, there are still some for the plane maker. Boeing isn’t the only manufacturer hoping to capitalize on the bonanza of new Iranian aircraft orders. The country’s flag carrier, Iran Air, has already announced a huge deal for 118 aircraft from its rival Airbus.

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