Boeing, Airbus Lose Out on US$40bn as Iran Export Licenses Revoked

Photo: Hasan Sarbakhshian / Associated Press

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The immediate repercussions of President Trumps decision to pull out of the nuclear accord with Iran will see export licenses for Boeing and Airbus revoked according to Steve Mnuchin, U.S. Treasury secretary.

While based in Toulouse, France, Airbus is directly affected as over ten percent of its planes’ parts are manufactured in the U.S. by companies including United Technologies Corp., Rockwell Collins Inc. and General Electric Co., thus making the sale of any of its planes to Iran subject to U.S. export restrictions. In total, the potential combined sales from the manufacturing duopoly were estimated at US$40 billion.

The consequences for both plane manufacturers will be different as they adopted different approaches to selling planes to Teheran.

In a conservative move, Boeing never closed its transaction with Iran Air, and downplayed the historic deal’s prospects after Trump took office. More recently, Boeing had discretely approached other customers for some of the 777-300ER jetliners that had been intended for Iran Air in 2018. Back on April 25 Boeing CEO Dennis Muilenburg told investors: “We have no Iranian deliveries that are scheduled or a part of the skyline this year, so those have been deferred in line with the U.S. government processes,” adding: “If those orders do come to fruition, if we do ultimately deliver airplanes, those represent opportunities for us.”

Airbus were more aggressive, recording the sales in its order backlog and delivered three jets, while its ATR venture shipped eight turboprops. Airbus has 95 undelivered planes intended for Iran Air in its backlog, including 16 crucial orders for the A350 wide-body jet whose program has been dogged with order cancelations, and 28 for its A330neo. Another 12 smaller turboprops manufactured by ATR were also due to be delivered to Iran’s national flag carrier.

An Airbus spokesman said jobs would not be affected. “Our [order] backlog stands at more than 7,100 aircraft, this translates into some nine years of production at current rates. We’re carefully analyzing the announcement and will be evaluating next steps consistent with our internal policies and in full compliance with sanctions and export control regulations. This will take some time.”