Iran Air Seeks Spare Parts After U.S.-Led Sanctions Ease

Iran Air is racing to secure spare parts to repair an aging aircraft fleet during the six-month suspension of U.S.-led sanctions tied to talks on the Islamic Republic’s nuclear program, its chief executive officer said.

While the carrier has deals in place for component supply and safety-related overhauls permitted under November’s Geneva accord, payments and shipments must be completed by July 20. Iran Air has already grounded 10 aircraft due to a lack of parts, leaving 47 operational, mostly from Airbus Group NV.

“For so many years there has been no direct contact,” Iran Air CEO Farhad Parvaresh said in an interview during an airline-industry gathering in Qatar. “To establish new contacts and contracts obviously takes time, and six months was not enough time to do everything.”

Talks between Iran and world powers are due to resume in Vienna on June 16, barely a month before a deadline for a deal that would remove sanctions in exchange for permanent curbs on Tehran’s nuclear activities. Boeing Co. (BA) and General Electric Co. (GE) are among companies granted component export licenses during the window as Iran seeks to renew an industry that local media reports say has suffered 200 accidents since 1990.

“Some companies were able to take the license and we could proceed,” Parvaresh said. “It has been a good start.”

New Orders

Iran Air plans to commence services to Shanghai by August using a Boeing 747 and will resume Moscow flights with an Airbus A300 or A320 that were halted after the carrier phased out the Boeing 727s that had served the route, the CEO said.

Should sanctions be fully lifted, Iran Air will need about 100 new aircraft and is interested in several models, including re-engined single-aisle planes from both Boeing and Airbus, together with the 777 and 787 and A330 and A350 wide-bodies.

“Most of the western aircraft manufacturers are interested because they have a feeling that if the windows and doors are open, they have to be there,” Parvaresh said. “Many of them contacted us already. They want to sell their aircraft to Iran because there’s big potential.”

The existing fleet is based around A300 and A310 wide-bodies -- planes Airbus stopped producing years ago -- plus A320s on short-haul routes, together with a handful of 747s and Fokker-100s. Seven of the jets currently idled could fly again with the right parts and attention, the CEO said.

Hostage Crisis

The U.S. imposed an export ban after its diplomats were taken hostage during the 1979 revolution, tightening the rules further after identifying Iran as a sponsor of international terror. Airbus continued as a limited supplier until a deal in 2000 for newer A330s fell foul of a decree outlawing trade in products with more than 10 percent U.S. parts -- including jet engines made by companies such as GE and Pratt & Whitney. (UTX)

Iran as a whole needs 400 passenger planes over the next decade once sanctions are lifted, Ali Reza Jahangirian, the head of country’s Civil Aviation Organization said in May, according to Fars. Other Iranian airlines have grounded about 90 aircraft and half could possibly fly again, Parvaresh said.

The component crisis at Iranian carriers has encouraged the emergence of a home-grown maintenance industry as a byproduct, the CEO said.

“Capabilities and potential in Iran have been growing,” he said. “We’re overhauling so many of our parts in-house, and our aircraft up to the 747.”

To contact the reporter on this story: Deena Kamel Yousef in Dubai at dhussein1@bloomberg.net

To contact the editors responsible for this story: Benedikt Kammel at bkammel@bloomberg.net Christopher Jasper

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