Iran sanctions to cost Boeing, Airbus $39bn

Following Tuesday’s announcement by US Treasury Secretary Steven Mnuchin that licenses for global Boeing and Airbus to sell planes to Iran will be revoked, speculations emerged in media that the aviation giants would lose $39 billion from lost Iran deals.

In December 2016, France-based Airbus Group signed a deal to sell Iran 100 jetliners worth about $19 billion at list prices. It has delivered three planes so far.

In the same month, Chicago-based Boeing Co. announced a contract with Iran for 80 aircraft valued at $16.6 billion. The company separately struck a deal with Iran’s Aseman Airlines to sell 737 MAX aircraft for $3 billion, with purchase rights for another 30 planes. No deliveries have been made yet.

Analysts – as reported by the Washington Post­­ – believed that the impact on Boeing would be modest because of a backlog of orders for 737 aircraft.

The company has nonetheless announced that it would consult with the US government over its Iran plane sales plans.

“We will consult with the US Government on next steps. As we have throughout this process, we’ll continue to follow the US government’s lead,” Gordon Johndroe, a Boeing vice president, was quoted as saying in a statement as reported by the Washington Post.

‘Boeing, Airbus export licenses to Iran to be revoked’

The US Treasury says licenses for Boeing and Airbus to sell passenger jets to Iran will be revoked following Washington’s withdrawal from the nuclear deal.

Airbus, based in Toulouse, France, is subject to US export restrictions because more than 10 percent of its jet parts originate with US companies such as United Technologies, Rockwell Collins and General Electric.

Mnuchin also said the Trump administration would cancel waivers that allowed the sale of commercial aircraft parts and services.

“These sanctions do impact all of the major industries,” he added. “These are very, very strong sanctions; they worked last time. That’s why Iran came to the table.”

He said there might be some exclusions, but he did not elaborate.