In 2016, Boeing announced an order for 80 brand new aircraft. Including a mix of widebodies and narrowbodies, Iran Air planned a fleet transition to newer jets after being shut out from taking new aircraft due to economic sanctions. However, when those sanctions were reinstated in 2018, it threw Iran Air’s order in doubt. Now, as Iran and the US are set to resume talks that could lift the sanctions, Iran Air’s order could be back on the books for Boeing.
Iran Air’s massive Boeing order
On December 11, 2016, Boeing announced an agreement with Iran Air for an order for 80 aircraft. This included 50 737 MAX 8s, 15 777-300ERs, and 15 777-9s. At the time, the order was valued at a whopping $16.6 billion at list prices, though Iran Air may have received some discounts with the order.
After months of US negotiations with Iran and Boeing, the order was announced, working with the US government to finalize a sale agreement. There were still some contingencies to be cleared at the time before Boeing started delivery of the new planes to Iran Air.
At the time of the order, the only jet that Iran Air committed to taking that was already in commercial service was the Boeing 777-300ER. The MAX would not enter service until the summer of 2017, and the 777X is still undergoing development, though certification is pressing forward.
However, after President Trump came into office and new sanctions went into effect against Iran, Iran Air lost both its Airbus and Boeing orders for as long as the sanctions were in effect.
After President Biden came into office, Iran reached out to the US to find out the status of its Boeing order. President Biden repeatedly stated before coming into office that he would move toward removing sanctions and reinstating a nuclear agreement with Iran.
Iran and the US to resume talks
Special Envoy for Iran under President Biden, Robert Malley, tweeted that the US is working with its partners to lay the groundwork to bring a nuclear agreement back in effect:
Talks next week with European, Russian, and Chinese partners to discuss what Iran and the US need to do to resume compliance with the #JCPOA. This is a first step. Difficult discussions ahead but on the right path.
— Special Envoy for Iran Robert Malley (@USEnvoyIran) April 2, 2021
It will take some time for a deal to come to fruition, but so will negotiating a new aircraft order. Since the initial order, the Boeing 777X has been delayed, and the MAX suffered a huge public blow with a major grounding that stretched on for well over a year. Both of those factors work against Boeing, though Iran Air would also love to have a new fleet of jets.
In addition to Iran Air, Iran Aseman Airlines signed a Memorandum of Agreement (MOA) with Boeing for 30 new 737 MAX jets at a list price value of $3 billion. The MOA also included options for an additional 30 MAX jets with deliveries slated to start in 2022. This order also did not come to fruition amid the sanctions.
Iranian airlines want new planes
Air carriers in Iran have suffered from sanctions that have limited their ability to take on new planes and forced them to continue to operate aging jets like the Airbus A300. Some of the older commercially operating aircraft in the world fly in Iran, and the airlines there are hoping to gain new orders. Before the sanctions went into effect, Iran Air was able to take delivery of some of its Airbus orders. However, it has still needed to fly older aircraft and conduct expensive and difficult maintenance on them.
Boeing would benefit financially and publically from a new order with Iran Air. The 777X program could use a lift, and the MAX has been selling relatively well since the US lifted the grounding order for the aircraft in November of 2020.
It will take time for talks to yield a final agreement and sanctions to be lifted. After they are lifted, it is expected that Iranian carriers will eagerly try to secure delivery slots with Boeing to revitalize their fleet and launch new routes to new destinations.
For now, it is a good sign that the US and Iran are starting to work again on laying the groundwork for a new agreement, but it will take some time. An agonizing wait for both Boeing and Iranian carriers, it could be incredibly fruitful for both.
Do you think Iranian carriers should place new orders with Boeing? Let us know in the comments!