Asghar Fakhrieh Kashan

Iran Air to conclude plane finance deals with China, EU by March

Financial Tribune- Iran has signed two preliminary contracts one with a Chinese and another with a European firm to finance its airplane orders, says deputy minister of roads and urban development in international affairs Asghar Fakhriyeh-Kashan, noting that the agreements are expected to be finalized by March 2018.

“We held serious talks with five major lessors; however, at the moment only two of them remain interested in financing Iran Air’s plane deals which is the results of the recent rise in pressures against Iran and the landmark nuclear agreement,” he said during a ceremony held on Saturday morning at Tehran Mehrabad Airport where two ATR planes landed to join the fleet of Iran’s flag carrier airline Iran Air.

“These two firms seem to be determined to go ahead with Iran Air contract,” he added.

According to the deputy minister, the finance contract for three Airbus jets has already been finalized with the two firms and “Iran Air is likely to take delivery of three or more Airbus planes during the next Iranian fiscal year (March 2018-19).”

“Talks are still underway over the number of Airbus deliveries in 2018, it might be more than three,” Fakhrieh Kashan noted.

The official also said that even if leasing companies fail to meet their commitments, plane makers themselves are committed to financing a number of aircraft in their contracts with Iran Air.

“Boeing has committed to finance eight jets for Iran Air,” he was quoted as saying by local media.

When asked about the US government’s measures to cancel Iran Air’s deal with Boeing, Fakhrieh-Kashan said, “In fact, Trump’s presidency has had no negative impact on the OFAC licenses or airplane deals so far,” referring to the United States House of Representatives’ new measure requiring Treasury Department officials to report to Congress on Iranian purchases of US aircraft and how those sales are financed. The legislation needs the approval of US Senate before it can take effect.

“OFAC licenses are eligible until 2020,” he said, “However, we are cautious about his (Trump’s) future measures”

Speaking at the same ceremony, Farzaneh Sharafbafi, the CEO of Iran Air, said that the flag carrier expects to take delivery of eight to ten brand new airplanes in the next Iranian fiscal year (March 2018-19).

She said the upcoming deliveries in 2018 include Boeing 777, Airbus A320 and Airbus A321, adding that the flag carrier is set to take delivery of Airbus A330 in early 2019.

Iran Air’s Fleet Rejuvenated

With the landing of the two ATR 72-600 planes in Tehran on Saturday, the average age of Iran Air’s fleet has lowered to 20 years, according to Sharafbafi.

The flag carrier has now 11 new airplanes delivered as part of the deals it has signed with global planemakers after the nuclear deal—one Airbus A321, two Airbus A330s, and 8 ATR 72-600 (including the two new ones). The company also expects deliveries of 12 more ATR planes by the end of 2018. Boeing deliveries are set to begin from April 2018. The next Airbus jet is scheduled to land in Tehran in June.

“A total of 1,350 seats have been added to Iran Air’s capacity with the new 11 airplanes that it has received (post-sanctions),” she was quoted as saying

Earlier this week, Iran’s Bank of Mine and Industry announced that it has financed the purchase of the two new ATR planes using National Development Fund of Iran’s resources.

The state-owned lender added that it has been the financier of the three Airbus jets delivered to the flag carrier.

The new Airbus jets mostly operate international flights, ATR turboprops have been used for starting new flight routes to smaller cities across the country.

Flights from Bandar Abbas to Zahedan, Kish, and Chabahar under the “Iran Air Regional” title and new flights from Ahvaz Ardebil, Rasht and other cities located in Caspian provinces are some of the new routes that have been launched using ATR fleet.

The two new turboprops are likely to be used for flights to Kashan, Arak, Shahroud, Kermanshah, Sanandaj, and Yasouj.

The ATR fleet was also used for transferring goods and those injured in the recent earthquake in Kermanshah Province, near the Iraqi border.