the post-sanction iranian revolution; its aviation industry perspective

7/24/2019 The Post-Sanction Iranian Revolution; Its Aviation Industry Perspective

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The conversation will be held to outline the context, business opportunities and arms

of the aviation industry set for needed development in Iran post-sanction. These

include airlines, airports and regulatory bodies.

CONT!T

Iran is the second largest economy in the "iddle ast and North #frica $"N#%

region after &audi #rabia, having an estimated gross domestic product $'()% of

*&(++ billion in +, according to the /orld 0an1. /ith a population of almost 23

million, Iran is similar in si4e to Tur1ey but with an economy characterised by a large

energy sector. Iran ran1s second in the world in natural gas reserves and fourth in

proven crude oil reserves. #ggregate '() and government revenues still depend toa large extent on oil revenues and are therefore intrinsically volatile 5 especially

given recent falls in oil prices. Iran is a mar1et with enormous potential 5 the lifting of

sanctions will surely produce a flurry of international expansion.

"ahan #ir, now larger than flag carrier Iran #ir, has been growing in China while

waiting for uropean opportunities. "ahan and Iran #ir currently account for about

678 of seat capacity in Iran9s international mar1et. Tur1ish #irlines serves seven

cities and has more favourable geography for connections to urope and North

#merica. It is the largest foreign carrier in Iran with about a 8 share of

international seat capacity, followed by mirates with 38. :lydubai has a ;8 share

but serves nine cities in Iran 5 more than any foreign carrier. Iranian airlines will be


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competing primarily with 'ulf networ1 carriers 5 mirates, :lydubai, tihad and

from Iran as Iran #ir does. These three 'ulf carriers and Tur1ish have an

average fleet age of under seven years.

#fter extensive negotiations and discussions between leaders of some of the most

powerful countries, a deal was finally struc1 earlier this year that could signal the end

of tough sanctions for Iran. )rovided Iran complies with the peaceful terms of the

nuclear agreement and satisfies the International #tomic nergy #gency of its future

intentions to meet the terms of the deal, wide-ranging * and *& sanctions currently

in place across various sectors could start to be lifted.

/hilst this is certainly progress for business in Iran, there will undoubtedly follow a

long period of transition before many /estern organisations will be free $and


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confident% to conduct business there without the need to consider the restrictions.

?owever, the aviation industry appears to have been granted a slightly easier, and

@uic1er, route to open trade as a result of a prioritised carve-out in the deal. This has

generally been perceived as a positive step by those in the sector with many

highlighting the acute need for investment in Iran9s aviation stoc1 and infrastructure

as long overdue.

The prospect of the lifting of *& aviation sanctions has spar1ed a flurry of interest

among investors in the industry who have previously avoided conducting business in

Iran. The difficulty of trading amongst the sanctions has broadly been two-fold.

:irstly, the bars on bringing aircraft parts into Iran has led to an increasingly out-of-

date fleet $the average age being more than years% and operational safetyproblems arising from the absence of investment. This also puts the Iran9s aviation


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industry to being unable to have an "AO industry for post-Aevolution aircraft types.

(ealings of aircraft trade were also under spotlight pre-lift of sanctions, with "ahan

#ir ac@uiring ex-B& #6+-; aircraft.

#n earlier interim nuclear agreement gave 0oeing Co. and engine-ma1er 'eneral

lectric Co. the green light to provide some spare parts for *.&.-made planes in

service in Iran since the 32s. 0oeing says it has only sold one spare part along

with some service bulletins and other materials since that deal came into force last

year. The pending agreement upon sanctions being lifted allows for licenses on the

sale of commercial aircraft, and Transportation "inister #bbas #1houndi has said his

country is prepared to spend about billion to purchase some + aircraft over

the coming decade. 0oeing9s "ideast communications head, :a1her (aghestani,

said the company is reviewing the deal Dbut until the *.&. government gives usfurther direction, it would be premature to comment.E ', which also has *.&.


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licenses to sell some medical e@uipment in Iran, said it loo1s forward Dto reviewing

the details of the agreement and will watch the regulatory landscape that may

unfold.E #irlines across the )ersian 'ulf from Iran are ramping up operations as

interest grows.

0elowF Iran #ir :leet )rofile $Ganuary ;%

Aircraft Type Current Future Historic Avg. Age Total

Airbus A300 13 5 30.3 Years 18


Airbus A320 6 3 20.3 Years

Airbus A3!0 1 1

"oeing #2# 5 5

"oeing #3# 6 6

"oeing #!# 6 16 36.0 Years 22

$ouglas $C%8 1 1

Fo&&er F#0 ' F100 16 ! 23.3 Years 20

(c$onnell $ouglas $C% 1 1
https://www.planespotters.net/production-list/search?fleet=Iran-Air&manufacturer=Airbus&type=A300&fleetStatus=currenthttps://www.planespotters.net/production-list/search?fleet=Iran-Air&manufacturer=Airbus&type=A300&fleetStatus=historichttps://www.planespotters.net/production-list/search?fleet=Iran-Air&manufacturer=Airbus&type=A300https://www.planespotters.net/production-list/search?fleet=Iran-Air&manufacturer=Airbus&type=A310&fleetStatus=currenthttps://www.planespotters.net/production-list/search?fleet=Iran-Air&manufacturer=Airbus&type=A310&fleetStatus=historichttps://www.planespotters.net/production-list/search?fleet=Iran-Air&manufacturer=Airbus&type=A310https://www.planespotters.net/production-list/search?fleet=Iran-Air&manufacturer=Airbus&type=A320&fleetStatus=currenthttps://www.planespotters.net/production-list/search?fleet=Iran-Air&manufacturer=Airbus&type=A320&fleetStatus=historichttps://www.planespotters.net/production-list/search?fleet=Iran-Air&manufacturer=Airbus&type=A320https://www.planespotters.net/production-list/search?fleet=Iran-Air&manufacturer=Airbus&type=A340&fleetStatus=historichttps://www.planespotters.net/production-list/search?fleet=Iran-Air&manufacturer=Airbus&type=A340https://www.planespotters.net/production-list/search?fleet=Iran-Air&manufacturer=Boeing&type=727&fleetStatus=historichttps://www.planespotters.net/production-list/search?fleet=Iran-Air&manufacturer=Boeing&type=727https://www.planespotters.net/production-list/search?fleet=Iran-Air&manufacturer=Boeing&type=737&fleetStatus=historichttps://www.planespotters.net/production-list/search?fleet=Iran-Air&manufacturer=Boeing&type=737https://www.planespotters.net/production-list/search?fleet=Iran-Air&manufacturer=Boeing&type=747&fleetStatus=currenthttps://www.planespotters.net/production-list/search?fleet=Iran-Air&manufacturer=Boeing&type=747&fleetStatus=historichttps://www.planespotters.net/production-list/search?fleet=Iran-Air&manufacturer=Boeing&type=747https://www.planespotters.net/production-list/search?fleet=Iran-Air&manufacturer=Douglas&type=DC-8&fleetStatus=historichttps://www.planespotters.net/production-list/search?fleet=Iran-Air&manufacturer=Douglas&type=DC-8https://www.planespotters.net/production-list/search?fleet=Iran-Air&manufacturer=Fokker&type=F100&fleetStatus=currenthttps://www.planespotters.net/production-list/search?fleet=Iran-Air&manufacturer=Fokker&type=F100&fleetStatus=historichttps://www.planespotters.net/production-list/search?fleet=Iran-Air&manufacturer=Fokker&type=F100https://www.planespotters.net/production-list/search?fleet=Iran-Air&manufacturer=McDonnell-Douglas&type=DC-9&fleetStatus=historichttps://www.planespotters.net/production-list/search?fleet=Iran-Air&manufacturer=McDonnell-Douglas&type=DC-9https://www.planespotters.net/production-list/search?fleet=Iran-Air&manufacturer=Airbus&type=A300&fleetStatus=historichttps://www.planespotters.net/production-list/search?fleet=Iran-Air&manufacturer=Airbus&type=A300https://www.planespotters.net/production-list/search?fleet=Iran-Air&manufacturer=Airbus&type=A310&fleetStatus=currenthttps://www.planespotters.net/production-list/search?fleet=Iran-Air&manufacturer=Airbus&type=A310&fleetStatus=historichttps://www.planespotters.net/production-list/search?fleet=Iran-Air&manufacturer=Airbus&type=A310https://www.planespotters.net/production-list/search?fleet=Iran-Air&manufacturer=Airbus&type=A320&fleetStatus=currenthttps://www.planespotters.net/production-list/search?fleet=Iran-Air&manufacturer=Airbus&type=A320&fleetStatus=historichttps://www.planespotters.net/production-list/search?fleet=Iran-Air&manufacturer=Airbus&type=A320https://www.planespotters.net/production-list/search?fleet=Iran-Air&manufacturer=Airbus&type=A340&fleetStatus=historichttps://www.planespotters.net/production-list/search?fleet=Iran-Air&manufacturer=Airbus&type=A340https://www.planespotters.net/production-list/search?fleet=Iran-Air&manufacturer=Boeing&type=727&fleetStatus=historichttps://www.planespotters.net/production-list/search?fleet=Iran-Air&manufacturer=Boeing&type=727https://www.planespotters.net/production-list/search?fleet=Iran-Air&manufacturer=Boeing&type=737&fleetStatus=historichttps://www.planespotters.net/production-list/search?fleet=Iran-Air&manufacturer=Boeing&type=737https://www.planespotters.net/production-list/search?fleet=Iran-Air&manufacturer=Boeing&type=747&fleetStatus=currenthttps://www.planespotters.net/production-list/search?fleet=Iran-Air&manufacturer=Boeing&type=747&fleetStatus=historichttps://www.planespotters.net/production-list/search?fleet=Iran-Air&manufacturer=Boeing&type=747https://www.planespotters.net/production-list/search?fleet=Iran-Air&manufacturer=Douglas&type=DC-8&fleetStatus=historichttps://www.planespotters.net/production-list/search?fleet=Iran-Air&manufacturer=Douglas&type=DC-8https://www.planespotters.net/production-list/search?fleet=Iran-Air&manufacturer=Fokker&type=F100&fleetStatus=currenthttps://www.planespotters.net/production-list/search?fleet=Iran-Air&manufacturer=Fokker&type=F100&fleetStatus=historichttps://www.planespotters.net/production-list/search?fleet=Iran-Air&manufacturer=Fokker&type=F100https://www.planespotters.net/production-list/search?fleet=Iran-Air&manufacturer=McDonnell-Douglas&type=DC-9&fleetStatus=historichttps://www.planespotters.net/production-list/search?fleet=Iran-Air&manufacturer=McDonnell-Douglas&type=DC-9https://www.planespotters.net/production-list/search?fleet=Iran-Air&manufacturer=Airbus&type=A300&fleetStatus=current


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(c$onnell $ouglas ($%80 2 25.3 Years 2

Total !5 !8 26.8 Years 3

0elowF "ahan #ir :leet )rofile $Ganuary ;%




Airbus A320 # #

Airbus A321 1 1 2

Airbus A3!0 11 15.7 Years 11

"oeing #!# 5 26.9 Years 5

"ritis) Aerospace "Ae 1!6'Avro

*+1# 1 22.5 Years 18

(c$onnell $ouglas ($%80 3 3

Tupolev Tu%15! 2 2
https://www.planespotters.net/production-list/search?fleet=Iran-Air&manufacturer=McDonnell-Douglas&type=MD-80&fleetStatus=currenthttps://www.planespotters.net/production-list/search?fleet=Iran-Air&manufacturer=McDonnell-Douglas&type=MD-80https://www.planespotters.net/production-list/search?fleet=Iran-Air&fleetStatus=currenthttps://www.planespotters.net/production-list/search?fleet=Iran-Air&fleetStatus=historichttps://www.planespotters.net/production-list/search?fleet=Mahan-Airlines&manufacturer=Airbus&type=A300&fleetStatus=currenthttps://www.planespotters.net/production-list/search?fleet=Mahan-Airlines&manufacturer=Airbus&type=A300&fleetStatus=historichttps://www.planespotters.net/production-list/search?fleet=Mahan-Airlines&manufacturer=Airbus&type=A300https://www.planespotters.net/production-list/search?fleet=Mahan-Airlines&manufacturer=Airbus&type=A310&fleetStatus=currenthttps://www.planespotters.net/production-list/search?fleet=Mahan-Airlines&manufacturer=Airbus&type=A310&fleetStatus=historichttps://www.planespotters.net/production-list/search?fleet=Mahan-Airlines&manufacturer=Airbus&type=A310https://www.planespotters.net/production-list/search?fleet=Mahan-Airlines&manufacturer=Airbus&type=A320&fleetStatus=historichttps://www.planespotters.net/production-list/search?fleet=Mahan-Airlines&manufacturer=Airbus&type=A320https://www.planespotters.net/production-list/search?fleet=Mahan-Airlines&manufacturer=Airbus&type=A321&fleetStatus=futurehttps://www.planespotters.net/production-list/search?fleet=Mahan-Airlines&manufacturer=Airbus&type=A321&fleetStatus=historichttps://www.planespotters.net/production-list/search?fleet=Mahan-Airlines&manufacturer=Airbus&type=A321https://www.planespotters.net/production-list/search?fleet=Mahan-Airlines&manufacturer=Airbus&type=A340&fleetStatus=currenthttps://www.planespotters.net/production-list/search?fleet=Mahan-Airlines&manufacturer=Airbus&type=A340https://www.planespotters.net/production-list/search?fleet=Mahan-Airlines&manufacturer=Boeing&type=747&fleetStatus=currenthttps://www.planespotters.net/production-list/search?fleet=Mahan-Airlines&manufacturer=Boeing&type=747https://www.planespotters.net/production-list/search?fleet=Mahan-Airlines&manufacturer=British-Aerospace&type=BAe-146&fleetStatus=currenthttps://www.planespotters.net/production-list/search?fleet=Mahan-Airlines&manufacturer=British-Aerospace&type=BAe-146&fleetStatus=historichttps://www.planespotters.net/production-list/search?fleet=Mahan-Airlines&manufacturer=British-Aerospace&type=BAe-146https://www.planespotters.net/production-list/search?fleet=Mahan-Airlines&manufacturer=McDonnell-Douglas&type=MD-80&fleetStatus=historichttps://www.planespotters.net/production-list/search?fleet=Mahan-Airlines&manufacturer=McDonnell-Douglas&type=MD-80https://www.planespotters.net/production-list/search?fleet=Mahan-Airlines&manufacturer=Tupolev&type=Tu-154&fleetStatus=historichttps://www.planespotters.net/production-list/search?fleet=Mahan-Airlines&manufacturer=Tupolev&type=Tu-154https://www.planespotters.net/production-list/search?fleet=Iran-Air&manufacturer=McDonnell-Douglas&type=MD-80&fleetStatus=currenthttps://www.planespotters.net/production-list/search?fleet=Iran-Air&manufacturer=McDonnell-Douglas&type=MD-80https://www.planespotters.net/production-list/search?fleet=Iran-Air&fleetStatus=currenthttps://www.planespotters.net/production-list/search?fleet=Iran-Air&fleetStatus=historichttps://www.planespotters.net/production-list/search?fleet=Mahan-Airlines&manufacturer=Airbus&type=A300&fleetStatus=currenthttps://www.planespotters.net/production-list/search?fleet=Mahan-Airlines&manufacturer=Airbus&type=A300&fleetStatus=historichttps://www.planespotters.net/production-list/search?fleet=Mahan-Airlines&manufacturer=Airbus&type=A300https://www.planespotters.net/production-list/search?fleet=Mahan-Airlines&manufacturer=Airbus&type=A310&fleetStatus=currenthttps://www.planespotters.net/production-list/search?fleet=Mahan-Airlines&manufacturer=Airbus&type=A310&fleetStatus=historichttps://www.planespotters.net/production-list/search?fleet=Mahan-Airlines&manufacturer=Airbus&type=A310https://www.planespotters.net/production-list/search?fleet=Mahan-Airlines&manufacturer=Airbus&type=A320&fleetStatus=historichttps://www.planespotters.net/production-list/search?fleet=Mahan-Airlines&manufacturer=Airbus&type=A320https://www.planespotters.net/production-list/search?fleet=Mahan-Airlines&manufacturer=Airbus&type=A321&fleetStatus=futurehttps://www.planespotters.net/production-list/search?fleet=Mahan-Airlines&manufacturer=Airbus&type=A321&fleetStatus=historichttps://www.planespotters.net/production-list/search?fleet=Mahan-Airlines&manufacturer=Airbus&type=A321https://www.planespotters.net/production-list/search?fleet=Mahan-Airlines&manufacturer=Airbus&type=A340&fleetStatus=currenthttps://www.planespotters.net/production-list/search?fleet=Mahan-Airlines&manufacturer=Airbus&type=A340https://www.planespotters.net/production-list/search?fleet=Mahan-Airlines&manufacturer=Boeing&type=747&fleetStatus=currenthttps://www.planespotters.net/production-list/search?fleet=Mahan-Airlines&manufacturer=Boeing&type=747https://www.planespotters.net/production-list/search?fleet=Mahan-Airlines&manufacturer=British-Aerospace&type=BAe-146&fleetStatus=currenthttps://www.planespotters.net/production-list/search?fleet=Mahan-Airlines&manufacturer=British-Aerospace&type=BAe-146&fleetStatus=historichttps://www.planespotters.net/production-list/search?fleet=Mahan-Airlines&manufacturer=British-Aerospace&type=BAe-146https://www.planespotters.net/production-list/search?fleet=Mahan-Airlines&manufacturer=McDonnell-Douglas&type=MD-80&fleetStatus=historichttps://www.planespotters.net/production-list/search?fleet=Mahan-Airlines&manufacturer=McDonnell-Douglas&type=MD-80https://www.planespotters.net/production-list/search?fleet=Mahan-Airlines&manufacturer=Tupolev&type=Tu-154&fleetStatus=historichttps://www.planespotters.net/production-list/search?fleet=Mahan-Airlines&manufacturer=Tupolev&type=Tu-154


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Tupolev Tu%20! 2 2

Total 61 1 2! 23.6 Years 86

0elowF Iran #seman #irlines fleet )rofile $Ganuary ;%


AT* !2'#2 6 3 20.2 Years

Airbus A320 3 22.7 Years 3

Airbus A3!0 1 24.0 Years 1

"oeing #2# 3 1 35.7 Years !

"oeing #3# 2 23.7 Years 2

Fo&&er F#0 ' F100 18 3 23.2 Years 21

Total 33 # 23.8 Years !0

0*&IN&& O))OAT*NITH

0ut all seems behind $for now% with new announcements for infrastructure renewaland rapid economic growth upon sanctions being lifted. The decreasing dependence
https://www.planespotters.net/production-list/search?fleet=Mahan-Airlines&manufacturer=Tupolev&type=Tu-204&fleetStatus=historichttps://www.planespotters.net/production-list/search?fleet=Mahan-Airlines&manufacturer=Tupolev&type=Tu-204https://www.planespotters.net/production-list/search?fleet=Mahan-Airlines&fleetStatus=currenthttps://www.planespotters.net/production-list/search?fleet=Mahan-Airlines&fleetStatus=futurehttps://www.planespotters.net/production-list/search?fleet=Mahan-Airlines&fleetStatus=historichttps://www.planespotters.net/production-list/search?fleet=Iran-Aseman-Airlines&manufacturer=ATR&type=ATR-42&fleetStatus=currenthttps://www.planespotters.net/production-list/search?fleet=Iran-Aseman-Airlines&manufacturer=ATR&type=ATR-42&fleetStatus=historichttps://www.planespotters.net/production-list/search?fleet=Iran-Aseman-Airlines&manufacturer=ATR&type=ATR-42https://www.planespotters.net/production-list/search?fleet=Iran-Aseman-Airlines&manufacturer=Airbus&type=A320&fleetStatus=currenthttps://www.planespotters.net/production-list/search?fleet=Iran-Aseman-Airlines&manufacturer=Airbus&type=A320https://www.planespotters.net/production-list/search?fleet=Iran-Aseman-Airlines&manufacturer=Airbus&type=A340&fleetStatus=currenthttps://www.planespotters.net/production-list/search?fleet=Iran-Aseman-Airlines&manufacturer=Airbus&type=A340https://www.planespotters.net/production-list/search?fleet=Iran-Aseman-Airlines&manufacturer=Boeing&type=727&fleetStatus=currenthttps://www.planespotters.net/production-list/search?fleet=Iran-Aseman-Airlines&manufacturer=Boeing&type=727&fleetStatus=historichttps://www.planespotters.net/production-list/search?fleet=Iran-Aseman-Airlines&manufacturer=Boeing&type=727https://www.planespotters.net/production-list/search?fleet=Iran-Aseman-Airlines&manufacturer=Boeing&type=737&fleetStatus=currenthttps://www.planespotters.net/production-list/search?fleet=Iran-Aseman-Airlines&manufacturer=Boeing&type=737https://www.planespotters.net/production-list/search?fleet=Iran-Aseman-Airlines&manufacturer=Fokker&type=F100&fleetStatus=currenthttps://www.planespotters.net/production-list/search?fleet=Iran-Aseman-Airlines&manufacturer=Fokker&type=F100&fleetStatus=historichttps://www.planespotters.net/production-list/search?fleet=Iran-Aseman-Airlines&manufacturer=Fokker&type=F100https://www.planespotters.net/production-list/search?fleet=Iran-Aseman-Airlines&fleetStatus=currenthttps://www.planespotters.net/production-list/search?fleet=Iran-Aseman-Airlines&fleetStatus=historichttps://www.planespotters.net/production-list/search?fleet=Mahan-Airlines&manufacturer=Tupolev&type=Tu-204&fleetStatus=historichttps://www.planespotters.net/production-list/search?fleet=Mahan-Airlines&manufacturer=Tupolev&type=Tu-204https://www.planespotters.net/production-list/search?fleet=Mahan-Airlines&fleetStatus=currenthttps://www.planespotters.net/production-list/search?fleet=Mahan-Airlines&fleetStatus=futurehttps://www.planespotters.net/production-list/search?fleet=Mahan-Airlines&fleetStatus=historichttps://www.planespotters.net/production-list/search?fleet=Iran-Aseman-Airlines&manufacturer=ATR&type=ATR-42&fleetStatus=currenthttps://www.planespotters.net/production-list/search?fleet=Iran-Aseman-Airlines&manufacturer=ATR&type=ATR-42&fleetStatus=historichttps://www.planespotters.net/production-list/search?fleet=Iran-Aseman-Airlines&manufacturer=ATR&type=ATR-42https://www.planespotters.net/production-list/search?fleet=Iran-Aseman-Airlines&manufacturer=Airbus&type=A320&fleetStatus=currenthttps://www.planespotters.net/production-list/search?fleet=Iran-Aseman-Airlines&manufacturer=Airbus&type=A320https://www.planespotters.net/production-list/search?fleet=Iran-Aseman-Airlines&manufacturer=Airbus&type=A340&fleetStatus=currenthttps://www.planespotters.net/production-list/search?fleet=Iran-Aseman-Airlines&manufacturer=Airbus&type=A340https://www.planespotters.net/production-list/search?fleet=Iran-Aseman-Airlines&manufacturer=Boeing&type=727&fleetStatus=currenthttps://www.planespotters.net/production-list/search?fleet=Iran-Aseman-Airlines&manufacturer=Boeing&type=727&fleetStatus=historichttps://www.planespotters.net/production-list/search?fleet=Iran-Aseman-Airlines&manufacturer=Boeing&type=727https://www.planespotters.net/production-list/search?fleet=Iran-Aseman-Airlines&manufacturer=Boeing&type=737&fleetStatus=currenthttps://www.planespotters.net/production-list/search?fleet=Iran-Aseman-Airlines&manufacturer=Boeing&type=737https://www.planespotters.net/production-list/search?fleet=Iran-Aseman-Airlines&manufacturer=Fokker&type=F100&fleetStatus=currenthttps://www.planespotters.net/production-list/search?fleet=Iran-Aseman-Airlines&manufacturer=Fokker&type=F100&fleetStatus=historichttps://www.planespotters.net/production-list/search?fleet=Iran-Aseman-Airlines&manufacturer=Fokker&type=F100https://www.planespotters.net/production-list/search?fleet=Iran-Aseman-Airlines&fleetStatus=currenthttps://www.planespotters.net/production-list/search?fleet=Iran-Aseman-Airlines&fleetStatus=historic


8/22

on road-transit in favour of rail and air based transport gives an opportunity for

modernisation technologies to flourish in the Iranian mar1et. 0ut with sanctions

compliance notwithstanding, businesses and entities see1ing to do trade in Iran must

understand the commercial ris1 of doing business in Iran through political, financial,

legal security contexts. #reas where the Iranian economy predominantly lac1s is

development, design, engineering and Joint investment for production and export. In

this aspect /estern businesses can help to bridge the gap by investing in the above

sectors and assisting in transfer of technology through Joint venture collaboration and

partnership with the private sector. ?owever, with the most complex sanctions

regime still in place, companies see1ing to do business in Iran must conduct crucial

due diligence before entering the Iranian mar1et. Companies and businesses that

have failed to comply with sanctions have been penalised heavily for sanctions

breeches meaning that due diligence and appropriate mar1et-preparation is critical.There are also plenty of legal tests which must also be overcome, for foreign-

investments to materiali4e in a law-abiding manner, as will be discussed as follows.

# 0usiness Opportunity #ppendix $inter-industrial% is placed at the end of the article

for reference.


9/22

#IAKIN&

The big order came through late Ganuary, where Iran #ir $IA, Tehran "ehrabad% has

signed an agreement with #irbus Industrie $#I0, Toulouse 0lagnac% for the

ac@uisition of = aircraft critical to its fleet renewal plans. #nnounced during

)resident ?assan Aouhani9s ongoing official visit to :rance, the order entailsL twenty-

one #6ceo family JetsF twenty-four #6neo family JetsF twenty-seven #66ceo

family JetsF eighteen #66neo $-3% JetsF sixteen #67-sF and twelve #6=-

=s. The order also includes pilot, maintenance training, and support services

critical to the new fleet9s entry into service. DToday9s announcement is the start of re-

establishing our civil aviation sector into the envy of the region and along with

partners li1e #irbus we9ll ensure the highest world standards,E :arhad )arvaresh,

Iran #ir Chairman and CO, said. )arallel to that agreement, Iran9s "inister ofAoads and *rban (evelopment, (r. #bbas #hmad #1houndi, signed a


10/22

comprehensive co-operation agreement with the uropeans which will see Iran9s civil

aviation infrastructure and regulatory oversight overhauled and moderni4ed. #mong

the areas involved in the deal are Iran9s air navigation services $#T"%, airport and

aircraft operations, regulatory harmoni4ation, technical and academic training, as

well as "AO and industrial cooperation.


11/22


12/22

There was also a signing an agreement 6 days later with #vions de Transport

AMgional $Toulouse 0lagnac% for the ac@uisition of forty #TA2-;s. Of the aircraft,

twenty are firm orders while the rest are options. The deal was signed in Tehran this

wee1 and follows commercial discussions held in Aome and )aris during Iranian

president ?assan Aouhani and "inister of Transport #bbas #hmad #1houndi9s

official visits to Italy and :rance late last month. (uring the negotiations, the Italian

and :rench governments played an important role through the participation of their

respective export credit agencies 5 &ace and Coface. #s previously reported, Iran #ir

is considering setting up a domestic air-taxi service to increase connectivity among

the country9s more remote and underserved regions. #t present, Iran #seman

#irlines $), Tehran "ehrabad% is the only Iranian operator of #TA e@uipment with a

fleet of four #TA2-s and two #TA2-7s.

The signing of #TA2;s come after Iran #ir considered setting up a regional

subsidiary which will focus on the Iranian domestic mar1et. Outlining his airline9s ten-

year growth plan, Iran #ir chairman :arhad )arvaresh told the recently ended C#)#

Iran #viation &ummit ; that the proposed unit would li1ely operate 7- to -

seater aircraft. Iran #ir currently serves #badan, #hwa4, #rdabil, 0andar #bbas,0irJand, 0ushehr, Chah-0ahar, 'heshm, 'organ, Isfahan Int9l, erman,

ermanshah, ish, Kar, "ashad, Aasht, &hira4, Tabri4, *rmieh, Ha4d, and Pahedan

locally. The flights operate in conJunction with 0u1ovyna #irlines $0


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existing ones at Tehran Imam homeini and Tehran "ehrabad. "eraJ #ir intends to

open up more routes to leisure destinations such as the islands of the )ersian 'ulf,

he told the C#)# Iran #viation &ummit ;. Though it operates an aged fleet of two

#6-;s, three #6-s, one #6-, one #6+-6 $BI)%, two 022-6s,

and one 0262-#dv, Aonaghi said the airline hoped to ac@uire an unspecified

number of regional Jets in order to add another seats in the next two to three

years, then another seats over the next five-year period.

#lso on the #irline sideF

(iscount carrier :ly(ubai launched a maJor expansion to Iranian destinations

from its base in the "ideast9s busiest airport of (ubai, announcing five new Iranian

destinations on top of two it already serves

(ubai9s mirates, the region9s biggest carrier, this month announced flights to

Iran9s second-largest city of "ashhad, with 7-wee1ly #66- services. It already

flies to Tehran.tihad made no formal announcement as of yet.

Bienna to Tehran, while

adding "unich on 7th#pril ;

"ahan #ir set to start 0oryspil and Copenhagen, with more announcements

to come.

Iran9s #/# #irways adds maiden aircraft, and set to begin commercial

operations.

#IA)OAT&


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#irports around Iran adopted its airport infrastructure around lower capacities and

capabilities in regards to handling variety of aircraft types. 0esides Tehran9s Imam

homeini International #irport, most airports in Iran are in dire need for development.

#n agreement with the Iranian "inistry of Aoads *rban (evelopment and the Iran

#irports Company was signed by during the state visit to :rance of Iran9s president,

?assan Aouhani. "ashhad is the country9s second-largest airport and Isfahan is the

fifth-largest. The agreement is the first step in a process that should result in wor1 to

renovate, extend and operate the two airports. The airport in "ashhad, which

recorded =. million passengers in +, is located in the northeast of the country

and serves the country9s second-largest city, a holy city that attracts more than

million pilgrims every year. The Isfahan airport, with .; million passengers in +,

serves Iran9s third-largest city, which was the capital of the )ersian empire in the

;th and 2th centuries and is 1nown for its cultural and historic heritage. The dealfollows the recent effective lifting of international sanctions. Binci sees airport activity

as holding maJor economic potential in Iran, given its large population and territory as

well as increases in tourism, which grew more than 678 in +.


15/22

#nother deal was also struc1, with )arsabad airport is set to reopen to all traffic

following the upcoming completion of runway resurfacing and terminal expansionwor1s. Kocated in Iran9s northwest near the border with #4erbaiJan, the airfield is

expected to reopen sometime during the second and third @uarter of this year.

Tehran has announced an ambitious aviation infrastructure moderni4ation

programme following the recent upliftment of sanctions. (uring the recently ended

C#)# Iran #viation &ummit ;, Iranian minister of roads and urban development

(r #bbas #1houndi said plans to expand Tehran Imam homeini International #irport

were at an advanced stage while noting that only ten of the more than sixty-five

operational airports in Iran, at present, have ade@uate infrastructure. This, he said,created tremendous opportunity for foreign investment and partnerships. :or his


16/22

part, Iran #ir $IA, Tehran "ehrabad% chairman :arhad )arvaresh expressed

optimism that the airline would be readmitted to I#T#9s billing and payment systems

which would tremendously simplify its revenue collection and payments for

overflights, airport fees and other services. Iran was suspended from I#T#9s clearing

house in due to financial sanctions.

#1houndi also said that Iran would invest *&(7 million to modernise its air traffic

management infrastructure with the aim of creating the most secure and safe

airspace in the region. This has been of greater investment due to growing traffic

utili4ing the Iran and the )ersian 'ulf geographies as ideal>safe overflight regions in

contrast of &yria and much parts of Ira@. Intel suggests the management systems

were around enroute control spacing and route optimi4ation systems, while tender

productions are being made for terminal approach systems and control tower

refurbishments.

A'*K#TOAH #*T?OAITI&

#s we 1now, things are a little raw at the moment, givenF

. The *.&. government has, by and large, left in place its embargo generally

forbidding *.&. companies, citi4ens and residents, and others in the *nited &tates to

engage in Iran-related activity. uropean *nion authorities, on the other hand, have

rescinded most * economic sanctions relating to Iran.

. The *.&. government has neutrali4ed most so-called Dsecondary sanctionsE

measures that have provided for sanctions against third country companies that

engage in specified types of activities relating to Iran.

6. The *.&. government has also, for the most part, eliminated the embargo9s

application to non-*.&. subsidiaries of *.&. companies acting abroad. :urthermore,

the *.&. government has, in limited respects, authori4ed *.&. parent companies to

permit and, to some limited extent, enable their non-*.&. subsidiaries to engage in

Iran-related activity. 0ut *.&. parent companies will need to be careful to avoid


17/22

support for their non-*.&. subsidiaries9 Iran-related activity that could expose the

parents to liability for facilitating such activity contrary to sanctions prohibitions 5

even as to Iran-related activity in which their non-*.&. subsidiaries are permitted to

engage.

+. The *.&. government has announced that it will license certain other activities

that are subJect to embargo prohibitions, including supply of civil aircraft and parts

and components to Iran and imports from Iran of Iranian-origin carpets and

foodstuffs.

7. #s companies evaluate their opportunities under the changed sanctions

regimes, much could depend on how regulatory authorities interpret and administer

the new arrangements. :urthermore, circumstances regarding Iran sanctions remainfluid and uncertain, particularly given continuing opposition to the Iran nuclear

agreement. (epending on political developments, one or both of *.&. and *

authorities could expand sanctions against Iran at any time.

Overview of * changesF all nuclear-related economic and financial * sanctions

against Iran have been lifted by the *. The decision was ta1en by the * following

the presentation of the report by the (irector-'eneral of the I## to the I## 0oard

of 'overnors and the *nited Nations &ecurity Council confirming that Iran has ta1en

the nuclear-related measures as agreed under the GC)O#. The * legislative acts

listed below terminate and amend the provisions of the * nuclear-related sanctions

legislation against Iran as set out in Council (ecision >+6>C:&) and Council

Aegulation $*% ;2>, Council (ecision $C:&)% 7>=;6 of = October 7,

Council Aegulation $*% 7>=; of = October 7, and Council Implementing

Aegulation $*% 7>=; of = October 7. "ore information can be found here

D#& &anction Implementation Notice

Overview of *.&9 changesF the *.&. government lifted certain sanctions against Iran

in compliance with the Implementation of the GC)O#. The sanctions lifted by the

*nited &tates are limited to those set out in &ection 2 of #nnex B of the GC)O#,

and relate mostly to Dsecondary sanctions,E meaning sanctions directed toward non-

*.&. persons for specified conduct involving Iran that occurs entirely outside of *.&.

Jurisdiction. "ost sanctions governing the conduct of *.&. persons remain in place,

with a few exceptions. *.&. policy on transactions regarding aviation has also been

liberali4ed, as outlined in &ection 6 below. # licence from O:#C is still re@uired for

involvement in an Iran-related transaction of any aircraft having 8 $or more% *.&.-origin by value. "ore information can be found hereF TreasuryF Iran &anctions
http://eeas.europa.eu/top_stories/pdf/iran_implementation/information_note_eu_sanctions_jcpoa_en.pdfhttps://www.treasury.gov/resource-center/sanctions/Programs/Documents/implement_guide_jcpoa.pdfhttp://eeas.europa.eu/top_stories/pdf/iran_implementation/information_note_eu_sanctions_jcpoa_en.pdfhttps://www.treasury.gov/resource-center/sanctions/Programs/Documents/implement_guide_jcpoa.pdf


18/22

Iran9s (eputy head of the Civil #viation Organi4ation of Iran has announced that the

country is planning to grow international flights to nations utili4ing growth of bilateral

agreements and diplomatic ties to grow capacity nations operate between Iran and

counterpart nations. # statement released by the )ublic Aelations (epartment of the

organisation @uoted "ohammad hoda1arami as saying that due to vast

international networ1 of airlines, development of aviation cooperation with

predominantly uropean, "iddle astern, #frican and &ubcontinental aviation

companies is a priority of the Civil #viation Organi4ation. ?e added that Iran is also

trying to update its memorandums of understanding with other countries in order to

increase the number of wee1ly flights to various destinations and also increase the

number of those destinations. Iran9s transport ministry has appointed "ohammad

hoda1arami as head of the country9s civil aviation authority. The appointment has

been confirmed by the Civil #viation Organisation, which oversees air transport in

Iran, following the resignation of the previous chief.

(evelopments have also been made to air tic1ets, which is to be liberali4ed by the

end of the current Iranian year $"arch 3, ;% as part of the :ifth :ive-Hear


19/22

conomic (evelopment )lan $-;%, said the head of Iran Civil #viation

Organi4ation, #li #bed4adeh, noting that the move will not necessarily translate into

higher prices. The move is certainly a contributing factor to the development of air

transport by improving services, IAN# @uoted the official as saying. The tic1et prices

of busy air routes lin1ing Tehran, "ashhad, Isfahan, &hira4 and Tabri4 will be the first

to undergo liberali4ation, he added.

#))N(I!

/hile it will li1ely be months before sanctions on Iran ease, business andpolitical leaders are wasting no time in trying to tap into a large and what they hope

will be a lucrative Iranian mar1et.

'ermany is dispatching a large trade delegation to Tehran on &unday. &pain

has a similar trip planned, and :rance9s top diplomat is eyeing a visit too. #ds for

uropean cars and luxury goods are starting to reappear in Tehran. #irlines in (ubai

are fast adding new Iran routes to meet growing demand.

#merican firms, though, have to be much more cautious. (eal or no deal,

*.&. sanctions not related to the nuclear program will still be in place and bar most

#merican companies from doing business with Iran.

That means they stand to lose out to uropean and #sian companies Q some

that still have business contacts in the country before sanctions were tightened in

recent years. DIt9s easier to say who is at a disadvantage. #nd that will be *.&. firms,E

said TorbJorn &oltvedt, principal "ideast analyst at ris1 advisory company Beris1

"aplecroft.

On paper, Iran holds plenty of promise. Two and a half times the si4e of

Texas, it is home to some = million people, sits atop the world9s fourth-largest oil

reserves and the second-biggest stores of natural gas, and has well-established

manufacturing and agricultural industries contributing to a + billion economy.

Kondon-based Capital conomics estimates the economy could surge ahead by ;-=

percent annually over the next several years as sanctions ease. Dverything is in

place for economic growth,E said (ominic 0o1or-Ingram, portfolio adviser at 0ritish

asset management firm Charlemagne Capital. ?is company earlier this year


20/22

announced a plan to launch Iranian investment funds in partnership with an Iranian

company. DIran has infrastructure, it has the institutions, it has the education,E he

added. DIt has a lot of highly educated people who will go bac1 to Iran if sanctions

are lifted.E

Tapping the mar1et won9t be easy. The elite Aevolutionary 'uard is deeply

involved in the economy and corruption is such a problem that )resident ?assan

Aouhani lamented late last year that once-secret bribes are now being handed out

openly. Iran ran1s only 6 out of =3 economies on the /orld 0an19s ease-of-

doing-business list. #ssuming the deal goes ahead as planned it will still ta1e at least

several months until nuclear-related sanctions are lifted. #nd those sanctions can

@uic1ly be slapped bac1 on if Iran fails to live up to its end of the bargain. That

means many multinationals are unli1ely to commit to big investments in theimmediate future, though the staggered sanctions relief also gives companies time to

gear up their operations, analysts say.

The oil industry is one area where Iran could use outside investment. :itch

Aatings expects it will ta1e years for Iran to get bac1 to the roughly .7 million barrels

a day it was exporting before , because investment in the sector has been

limited under sanctions. Chevron Corp. spo1esman urt 'laubit4 said the company

is reviewing the nuclear deal to understand its implications, but for now it remains Din

strict complianceE with *.&. and international laws. xxon "obil Corp. declined to

comment.

#lthough planned some time ago, 'ermany9s three-day trip led by conomy

"inister &igmar 'abriel comes less than a wee1 after the nuclear accord was

reached.

&panish Industry "inister Gose "anuel &oria said he will be Joined on a

&eptember trip by &pain9s foreign and development ministers, and he expects goodprospects for &panish companies in industry, energy, telecommunications, tourism

and infrastructure.

:rench :oreign "inister Kaurent :abius said /ednesday he would be paying

a visit to Iran as :rance loo1s to explore business opportunities, though he made a

point of saying commercial interests were not what drove the deal. # large :rench

business delegation, anticipating a resolution to the nuclear issue, traveled to Tehran

last year, ran1ling *.&. officials.


21/22

&wit4erland dispatched a business delegation to Iran at the end of #pril, soon

after Iran and world powers reached a framewor1 deal that paved the way for this

wee19s agreement.

DThere is pent-up enthusiasm to do somethingE said "artin Gohnston, director-

general of the 0ritish Iranian Chamber of Commerce, a networ1 of politicians and

business leaders that hope to promote trade. ?e said he expected businesses would

go to Tehran to examine the opportunities for the time being. DThey are waiting for

the structures to be in place to be able to trade, not only the legal arrangements but

the suitable ban1ing arrangements,E he said.

#*TO"#TIBF In some ways, loosening sanctions will mar1 a return to the

way things used to be. :rench automa1er ) )eugeot Citroen has an earlyadvantage in Iran than1s to its strong mar1et position in the country Q a legacy of its

former partnership with domestic automa1er Iran hodro, which assembled )eugeot-

branded vehicles from 1its. Other uropean automa1ers have good brand

recognition in Iran too, as many only officially cut their ties to Iran under pressure

earlier this decade. &ergio "archionne, the chief executive of :iat Chrysler

#utomobiles, said this wee1 that the Iranian mar1et Dwill be an opportunity for all of

usE if it opens up. :iat only stopped selling cars in Iran in , following similar

moves by )eugeot, &outh orean automa1er ?yundai and 'erman sports carma1er

)orsche. :ord "otor Co. is ta1ing a more cautious tone, saying it complies with *.&.

sanctions and will monitor changes that come out of the agreement. In the

meantime, its Chinese partner, Changan, has signed a partnership with Iran9s &aipa

#utomotive 'roup to Jointly develop new vehicles.

In "ay, 0rilliance #uto 'roup became the latest of several Chinese

automa1ers to begin production in Iran, opening an assembly plant west of Tehran

with a local partner, )ars hodro, to ma1e sedans and hatchbac1s. Chinese state-

owned manufacturers of subway e@uipment have found a way around financialsanctions, stri1ing a deal in 6 to trade 67 train cars in exchange for Iranian oil.

&outh orean companies have been building mar1et share in Iran, too, after

the two countries agreed to let orean businesses use &outh orean currency for

financial transactions with their Iranian counterparts. &outh orea9s finance ministry

said this wee1 that expanding economic cooperation with Iran would be an

opportunity for the country, which is a buyer of Iranian crude oil and exported +.

billion worth of goods to Iran last year.


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