28 Mar 2024
Wednesday 5 April 2017 - 17:56
Story Code : 256144

High stakes for Trump as Boeing battles Airbus for billions In Iran

Forbes |Niall McCarthy: Boeing has just announced its second major airliner sale to Iran since the Shah era. Iran Aseman Airlines signed a tentative deal on Tuesday to buy at least 30 Boeing 737 MAX aircraft in a deal worth about $3 billion. Preceded by a $16.6 billion sale of 80 aircraft to Iran Air under the Obama administration, Tuesday's sale is going to be a major test of Boeing's ties to President Donald Trump.

Even though Trump has not publiclyvoicedhis opposition to U.S. aircraft sales to Iran, the president has consistently criticized the country for being a state sponsor of terrorism as well as a destabilizing force in the Middle East. He has also repeatedly denounced the 2015 nuclear agreement which opened the door for western aviation companies to sell their jets to Iranian airlines.

For decades, U.S. sanctions prevented Iranian civilian aviation from buying western-made planes and spare parts which led to countless accidents and a rusty old airliner fleet requiring a $20 billion investment. As can be seen from the following infographic, both Boeing and Airbus have inked lucrative deals in the country since the nuclear deal was signed. However, given Trump's hostile stance on Iran and his pledge to protect and restore American manufacturing jobs, the president may find himself between a rock and a hard place.

[caption id="" align="alignnone" width="685"] An Airbus A321 bearing the logo of Iran Air is pictured on January 11, 2017 at the Airbus delivery center, in Colomiers southwestern France. (PASCAL PAVANI/AFP/Getty Images)[/caption]

Tuesday's agreement requires U.S. government approval and marks the first big business deal announced by any American company in Iran since Trump took office in January. Most notably, Boeing said in a statement that "an aerospace sale of this magnitude creates or sustains approximately 18,000 jobs in the United States".

For President Trump, the stakes could not be higher.Last month, the U.S. imposed sanctions on 25 Iranian entities and individuals over missile tests in the country while Iran was also included on the list of Muslim-majority countries subject to a controversial visa ban - a ban which is still held up inthe courts. Blocking Boeing's sales would put Trump's policy of protecting U.S. manufacturing jobs into direct conflict with his administration's hostile stance towards Tehran. The president certainly has a dilemma on his hands.
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