Airbus: Sale of Aircraft to Iran Faces Financial Obstacles

Airbus has stated that concerns about doing business with Iran are preventing the finalization of a contract for the sale of passenger aircraft to Tehran. The issue of transferring money from Iran has been cited as one of the problems in executing the contract between Tehran and Airbus. John Leahy, Airbus's Chief Customer Officer, told the Wall Street Journal on Wednesday, June 2, that although the contract for selling aircraft to Iran is 'progressing,' the process is 'slower than expected.' He added, 'We are looking for a way to get money out of Iran through the banking system.' This statement comes as Iran Air, which has faced a severe shortage of aircraft due to the retirement of some of its old planes in recent months, has stated that it will receive eight new aircraft by the end of this year, five of which will be Airbus and three will be ATR aircraft. During President Hassan Rouhani's visit to France in January 2016, a contract was signed for the purchase of 118 Airbus aircraft worth 25 billion euros between the two parties. However, there has been ambiguity regarding how the Iranian side will finance this contract. John Leahy also warned that if this problem is not resolved, it means 'the contract has not been executed.' Although banking sanctions related to Iran's nuclear program have been lifted or suspended, and both the U.S. and European governments have signaled to international banks to trade with Tehran, U.S. human rights and missile sanctions against Iran and its banking system remain in place. Iranian banks are also under suspicion of collaborating with terrorist groups and money laundering, and these issues have led many major international banks to refrain from doing business with Iran. A day before the remarks from the Airbus executive, Iranian Foreign Minister Mohammad Javad Zarif described banking issues as 'the only obstacle' to economic cooperation between Iran and Europe and urged the U.S. to eliminate 'psychological barriers' in this regard and to assure European banks that they will not be penalized for cooperating with Iran. Meanwhile, the U.S. Secretary of State and his British, German, and French counterparts, along with the EU's foreign policy chief, on May 20, issued a statement urging banks and traders not to overlook legal investment opportunities in Iran. These countries have also expressed readiness to dispel doubts in this regard.