Russians and the Aircraft Market in Iran

After the U.S. withdrawal from the JCPOA, Boeing will no longer sell aircraft to Iran, and Airbus will find it very complicated, if not impossible, to sell even if they intend to. However, the Russians can emerge as the main winners by slightly modifying their aircraft and sending billions of dollars to their aviation industry. The Russian aviation industry is currently returning to its peak with two new products: the Sukhoi Superjet 100 and the MC-21, both of which use parts from American companies. The Russians have announced that they are redesigning these aircraft with entirely Russian components. Currently, any passenger aircraft that has at least 10% of its parts made by American companies requires an official license from the U.S. Treasury Department or OFAC to be sold to Iran. The U.S. Treasury Department has stated that the license for selling aircraft to Iran will be revoked after a 90-day period. With this revocation, almost none of the currently manufactured aircraft in the world can be exported to Iran. However, if manufacturers can replace American parts with non-American alternatives, the possibility of selling aircraft to Iran will arise. So far, over $40 billion in contracts and agreements for purchasing aircraft have been signed between Iranian companies and Boeing and Airbus, and the Iranian aviation industry will need 500 new aircraft in the next ten years. This demand is so high that it could transform the aviation industry of a country like Russia. The Sukhoi 100 has sold about 136 units in the last decade, with 378 units ordered. Thus, a large market of several hundred units in Iran could transform this company. The same potential exists for the MC-21. Two airlines, Aseman and Iran Airtour, have now signed contracts to purchase 40 Sukhoi Superjet 100 aircraft. Aseman Airlines has stated in a press release that this model is the latest design of the Superjet 100 series, equipped with avionics and a series of other components that are exempt from sanctions. The body design of the Superjet 100 was done by Sukhoi, but Boeing was the design consultant. The wing control system was designed by Liebherr of Germany, and the interior of the aircraft was designed by Pininfarina of Italy, while Sukhoi's strategic partner for manufacturing this aircraft is Alenia of Italy. Most of the aircraft's electronic and navigation equipment was designed and manufactured by Thales of France. The Sukhoi Superjet family accommodates between 78 to 98 passengers in various classes. Aeroflot, the flag carrier of Russia, has received 52 Superjets and ordered 42 more. Considering this information, a potential order of over 100 units of these aircraft with the cancellation of purchases from Western companies could be a significant success for Sukhoi. Sukhoi is also developing a 70-seat version of this aircraft, known as the SSJ-70. The flight range of the Sukhoi aircraft covers all points in Iran and neighboring countries. Aeroflot has received 52 of these aircraft and ordered 42 more. With this information, a potential order of over 100 units of these aircraft with the cancellation of purchases from Western companies could be a significant success for Sukhoi. Another modern Russian aircraft is the MC-21, which is currently undergoing flight tests. So far, 205 units of this aircraft have been ordered. This model is a direct competitor to the Boeing 737 and Airbus A320 series. Iran Air alone had ordered 46 Airbus A320s and 50 Boeing 737 MAXs. With the cancellation of these orders, Iran Air could potentially order about 100 MC-21s from Russia. Other Iranian companies have also signed contracts or agreements to purchase over 100 units of Boeing 737 and Airbus A320 models, which, with the cancellation of Airbus and Boeing contracts, will likely shift this market towards Russian aircraft. The Irkut MC-21 can accommodate between 165 to 210 passengers. With this policy, the Russians are trying to penetrate the single-aisle aircraft market, which is the most demanded segment of passenger aircraft worldwide. This aircraft can cover a flight range of 6,400 kilometers. However, a major problem will remain for Iranian airlines; the Iranian aviation industry needs about 100 long-range aircraft as well. Currently, the Russians do not produce any long-range aircraft. This aircraft will solve the problem for Iranian airlines in covering routes from neighboring countries to European countries. It uses two different types of engines, one made in Russia and the other in the United States. The first engine, PD-14, is developed from the engines of Tupolev 204, Ilyushin 76, and Ilyushin 96. Due to the U.S. withdrawal from the JCPOA, Iran can only order the Russian engine model. However, with these two aircraft models, a major problem will still remain for Iranian airlines; the Iranian aviation industry needs about 100 long-range aircraft. Currently, the Russians do not produce any long-range aircraft. However, this factor may change in the near future in favor of the Russians in the Iranian market. According to Reuters, two state-owned companies, COMAC of China and UAC of Russia (United Aircraft Corporation), are designing a long-range aircraft. The first flight of this aircraft is expected between 2022 and 2025. Iran Air was supposed to receive its first new long-range aircraft, a Boeing 777, this year. This twin-engine aircraft is targeted to carry nearly 300 passengers with a range of up to 12,000 kilometers. With the sale of 100 long-range aircraft to Iran, the necessary investment for the development of the aviation industries of China and Russia will be provided, as it seems unlikely that airlines worldwide will trust any products other than Airbus and Boeing in this flight class anytime soon.