Iran opens new chapter with 114 Airbus planes deal

Iran opens new chapter with 114 Airbus planes deal

TEHRAN — Iran said on Sunday that it would buy 114 Airbus planes to revitalise its ageing fleet, in the first major commercial deal the country has announced since the lifting of sanctions under its nuclear agreement, the country said at the weekend.

Transport Minister Abbas Akhoundi said a deal on the purchase would be signed between national carrier Iran Air and Airbus during a visit to Paris this week by President Hassan Rouhani.

Mr Rouhani was set to travel to Italy and France from Monday to Wednesday, on his first visit to Europe since the implementation of the deal curbing Tehran’s nuclear activities in exchange for the lifting of economic sanctions.

He has hailed the agreement as a “new chapter” for Iran as its economy returns to global markets. Modernising the country’s air fleet and infrastructure is a top priority, with Mr Akhoundi saying only 150 of the country’s 250 planes were operational.

“We have been negotiating for 10 months” for the purchase of planes, but “there was no way to pay for them because of banking sanctions”, Iranian state media quoted Mr Akhoundi as saying. “We need 400 long-and mid-range and 100 short-range planes,” he said.

Mr Akhoundi said the first batch of planes would arrive in Iran by March 19, but provided no financial details of the deal with Airbus. An Airbus spokesman declined to comment.

Iran, with a population of 79-million, has a good road network, but needs major transport upgrades. Iran’s airports needed $250m worth of upgrades in navigation systems, Mr Akhoundi said.

Only nine of Iran’s 67 airports are operational. Iran has had several air crashes in recent years blamed on ageing planes, poor maintenance and a shortage of new parts.

News of the Airbus deal came as aviation industry representatives from 85 firms met in Tehran at the weekend to assess opportunities after sanctions were removed.

“It’s a really exciting time; there’s never been a situation like this,” said Peter Harbison, head of Capa Consulting, which organised the conference. “A whole array of different aviation services and new jobs … are going to be created.

“Aviation is one of those industries that creates massive economic flow-on benefits, so tourism will expand, so you’ll need more infrastructure growth in hotels and right across the board,” he said.

Mr Akhoundi said Iran was also negotiating with US aircraft manufacturer Boeing, but provided no details.

Iran was in talks with the US on the possibility of reopening direct air routes, cut after the 1979 hostage crisis that ended diplomatic ties between the two countries.

Mr Rouhani’s European tour will see him seeking to restore commercial ties with Italy and France, major economic partners before the tightening of international sanctions in January 2012.

Meeting with Chinese President Xi Jinping at the weekend, Mr Rouhani said the two countries aimed to build economic ties worth up to $600bn in 10 years.

They signed a slew of trade agreements including a $2bn contract for China to electrify the railway line linking Tehran with Mashhad.