Aviation Week: Airbus, Boeing Sales To Iran Now Off Limits
WASHINGTON—
Airbus expects to be bound by the Trump administration’s prohibitions against selling U.S. aircraft and parts to Iran, even if Europe maintains a more business-friendly approach to Iran, a top executive told Aviation Daily.
“In this case, [the U.S. and Europe] are two opposing forces, but the fact of the matter is we will follow the rules and that means we’re going to follow the sanctions and regulations,” Airbus Americas CEO Jeffrey Knittel said after President Donald Trump’s May 8 announcement that the U.S. would be exiting the nuclear accord with Iran. “It’s as simple as that.”
In a sitdown interview at Airbus Americas’ Herndon, Virginia headquarters in suburban Washington, Knittel said his European-based company will have to carefully review the final White House order and subsequent Treasury Department actions regarding Iran sanctions, but the company essentially believes whole aircraft are now off limits for sale to Iran. “Our goal is to sell airplanes,” he said. “But we have to do that within the bounds and rules and laws of the country and of the world, and we will do that.”
Rival
Boeing made a similar proclamation. “We will consult with the U.S. government on next steps,” said Gordon Johndroe, Boeing VP for government operations communications. “As we have throughout this process, we’ll continue to follow the U.S. government’s lead.”
Trump announced what he said was a withdrawal from the Obama administration’s nuclear deal with Iran. The Treasury Department said previously issued licenses to OEMs, allowing aircraft sales to Iran, would be revoked. While most financial analysts thought the lost sales were not significant to the bottom lines of Airbus, Boeing and
Embraer, they are still noteworthy.
For instance, Boeing had agreements with Iranian airlines for about $20 billion worth of new airliners, at list prices, including 110 737 MAXs and 30
777s. Airbus was the first aircraft OEM to sign a preliminary agreement with Iran Air in January 2016 for up to 118 aircraft, including 21
A320ceo-family aircraft, 24
A320neo-family aircraft, 27
A330ceos, 18 A330-900s and 12
A380s. Iran Air took delivery of its first aircraft from that order, an A321ceo, in Jan. 2017. Embraer was believed to have at least 20
E195s lined up for sale to Iranian airlines worth more than $1 billion at list prices.
“The Trump administration will now look to re-negotiate with Iran, but we believe the potential for firm orders, or deliveries by Boeing into Iran, are now well into the future,” Canaccord Genuity analyst Ken Herbert said. “Near term, we believe the re-imposition of sanctions will contribute to rising crude prices, and could be a tailwind for sentiment around defense stocks, but [it] does not have a material negative impact on Boeing’s backlog.”
Expectations that the sales would be lost had been growing for months as Trump openly criticized the Iran deal and had threatened to pull out of it since being a candidate. As such, industry was not surprised, according to many stated reactions, and had been preparing for Trump’s decision.
“There were indications of what could happen,” Knittel said. “But I think the most important thing is to make sure we have all the facts, and then once we have those facts to take the appropriate action. But whatever we do, it’s going to be in compliance with the laws.”
Boeing CEO Dennis Muilenburg on April 25 assured analysts and reporters that his company had continued to build risk mitigation into its 777 production plan. “The good news is that the fundamental strength of the 777 product line and the increased sales volume that we’re seeing in the marketplace both for 777-300ERs and for the 777 freighters has only bolstered our confidence in that line,” he said.
Where’s that wannabe French fellow wanting to do business with Iran?!