Boeing to lose out on $20bn in Iran contract after US withdrawal

“We will continue to follow the US government’s lead,” Dennis A. Muilenburg, the chief executive, told a luncheon crowd at the Economic Club of Washington, New York Times reported.

He said Boeing had not committed to any production slots for the planes the company had planned to build for Iran, given there was a chance the United States would pull out of the 2015 pact.

Mr. Muilenburg spoke a day after the administration said Boeing would see its $20 billion contract to supply aircraft to Iran terminated because of the United States’ withdrawal from the nuclear deal, thus restoring stringent sanctions it had imposed previously. Boeing’s rival, Airbus, will also lose its license to sell to Iran.

The announcement means Boeing will lose out on a lucrative new market for jetliners, but the move will likely cost the company less than it will Airbus. Boeing agreed to sell 80 passenger jets to Iran Air for about $17 billion in 2016, but it never began building the planes or factored them in as future revenue.

Airbus, on the other hand, already sent Iran three planes and booked the $19 billion Iran Air order for 100 new planes as a part of its backlog.