Published: Tue, December 13, 2016
Economy | By Melissa Porter

Iran seals deal with Boeing to buy 80 planes worth $16.6B

Boeing today in a press release announced an agreement with Iran Air for 80 aircraft, including 50 737 MAX 8s, 15 777-300ERs, and 15 777-9s.

The reduction of one of Boeing's most profitable planes comes as the company is spending to produce the 777X successor to the 777, building a stretch 787, known as the 787-10, and ramping up production of a refreshed version of its 737.

Iran's state-run IRNA news agency said the planes would be delivered over the next decade. Monthly deliveries are now scheduled to fall to 5.5 per month in 2018 as Boeing starts to build 777X test models.

Iran is rushing to update its aging commercial airline fleet - according to The Tehran Times, the country's state-owned airline has also placed orders for 100 Airbus planes and 20 smaller craft made by France-based ATR. Airbus needed US approval because at least 10 percent of its planes' components are of USA origin.

The U.S. and other world powers agreed previous year to lift crippling sanctions on Iran in exchange for it curbing its nuclear activities. It is expected to help Iran modernize and expand its aging commercial aircraft fleet after decades of worldwide sanctions.

"Today's agreement will support tens of thousands of directly associated with production and delivery of the 777-300ERs and almost 100,000 in the USA aerospace value stream for the full course of deliveries", said Boeing. "We hope that despite changes in the USA administration, the country will remain loyal to its commitments".

But before they break out the bubbly, Boeing will have to convince US President-Elect Donald Trump, who is an outspoken critic of dealings with Iran, that the deal truly is good for America. That legislation must still pass the Senate, where it will likely face opposition from Democrats. For example, the USA continues to block companies from doing business with Iran in US dollars.

Trump has vowed to dismantle the Iran nuclear agreement, which called for the US and European governments to reduce sanctions on the Iranian regime in return for Iran accepting curbs on its nuclear activities.

According to a Reuters' source, Iran's national carrier IranAir is at the "very final stage" of completing a deal with Airbus.

"Making the purchase of the Boeing planes will add 50,000 seats to the capacity of Iranian air fleet", he added.

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