Chinese firm to fund Iran plane purchases

Iran’s media say the country’s national airline Iran Air has signed an agreement with a Chinese company to provide funding for the company’s plane purchase campaigns – most notably those pursued with Airbus and Boeing.

The Persian-language newspaper Iran reported that the agreement had been signed on Monday at Iran Air premises in Tehran, citing a statement by the country’s Ministry of Roads and Urban Development.

“After months of negotiations, a Chinese company has accepted to provide funding for purchases of Iran Air planes, wrote the newspaper without mentioning the name of the Chinese company.

“The problem of providing funds for new plane purchases has thus been resolved.”

In December 2016, Boeing sealed deals with Iran’s flag-carrier airliner Iran Air over sales of 80 jets valued at $16.6 billion. They include 50 narrow-body Boeing 737 passenger jets and 30 wide-body 777 aircraft.  Iran Air also sealed deals with Airbus over purchases of 100 planes worth $18-20 billion at list prices and has already received three of them.

Iran Air has also signed a deal with the Franco-Italian aviation player ATR in early 2017 over a total of 20 turboprop planes and has already received six planes.

Officials in Tehran had already said Iran Air would under deals with Airbus and Boeing pay only 15 percent of the amount for the planes purchased and that the remaining 85 percent would be provided by funders.

“This has obstructed further deliveries of planes,” Iran added in its report, emphasizing that deliveries of new planes could resume in summer.

“Iran Air had to purchase three Airbus planes that have been delivered in cash to make the contract effective,” it wrote. “It had been agreed that the amount would be considered as pre-payment for planes once the problem over finding would be resolved. Now that the problem of funding has been resolved, the next plane would be expected in Tehran after 21 June 2018, as per the agreement with Airbus”.

Iran had already announced that it expected to receive the first Boeing around May 2018. However, the future of the deal with the American aviation giant was thrown into doubts after US President Donald Trump increased his rhetoric against the Islamic Republic last year.

There have even been speculations that Trump might move to stop Boeing’s deal with Iran.