A potential U.S. withdrawal from the Iran nuclear pact jeopardize billions of dollars in airplane sales.
President Trump is facing a May 12 deadline to decide whether to continue to lift sanctions on Iran, a key part of the Joint Comprehensive Plan of Action that allowed more international companies to do business in the country. Trump has publicly attacked the terms of the pact negotiated by former President Barack Obama and previously suggested he is prepared to exit the accord.
[Also read: Iran warns: US will regret withdrawing from nuclear pact]
For now, investors are merely guessing at the outcome. A growing expectation that Trump will seek to alter the deal or abandon it helped push U.S. oil prices above the $70-a-barrel mark for the first time since 2014 and stalled aircraft deliveries to Iranian carriers over the past year.
Aerospace giant Boeing had agreed in 2016 to sell 80 aircraft – 50 single-aisle 737 MAX 8s, 15 widebody 777-300ERs and 15 twin-engine 777-9s – to Iran Air for $17 billion. The Chicago-based company reached a separate $3 billion agreement with Iran Aseman Airlines in 2017 to sell 30 single-aisle 737s.
No deliveries – the point in transactions where planemakers receive much of their payments – have been scheduled for the remainder of this year, Boeing Chief Executive Officer Dennis Muilenburg told investors in April.
“Those have been deferred again in line with the U.S. government process,” he said. “We’re going to follow the U.S. government’s lead, and we’ve ensured that from a skyline management standpoint and from a production systems standpoint, we are not dependent on those aircraft.”
There might be ways to salvage the revenue if the U.S. exits the Iran agreement, legal scholars say. Boeing and U.S. parts manufacturers could create firms less subject to American oversight and “work with those entities to fulfill their obligations to the Iranian airlines industries,” said Philip Nichols, a professor of legal studies and business ethics at the Wharton School of the University of Pennsylvania. “They’d be doing it to legally comply with the new regulatory environment.”
A Boeing spokeswoman did not respond to emailed inquiries.
European aircraft manufacturer Airbus, Boeing’s largest rival, has moved forward, meanwhile, on a $19 billion agreement from 2016 to sell 46 single-aisle planes and 54 wide-body jets to Iran Air. An Airbus spokesman said the company has delivered three aircraft in total, one single-aisle A321 and two leased widebody A330s. He declined to provide any guidance on additional deliveries for 2018.
Iran Air CEO Farzaneh Sharafbafi previously told Reuters that the company expected to receive its first Boeing passenger jet in 2018 but noted that future shipments could be affected if the U.S. did not extend export licenses that expire after 2020.
