Iran Will Sue Plane Manufacturers Over Undelivered Aircraft

When President Obama lifted sanctions from Iran, airline aircraft orders came flooding in. Airbus was the first major aircraft manufacturer to deliver a brand new jet to Iran on 11 January 2017. The head of Iran Air described it as a “sunny day” for relations between Iran and Europe and “a memorable one for aviation in the nation of 80 million people”.

Following President Trump’s entry into the White House, his administration this year announced the return of US sanctions on to Iran, leaving Airbus and other aircraft manufacturers with no choice but to cancel the rest of their deliveries to the country, given all orders are subject to US Treasury licences. The reason even European plane-makers such as Airbus and ATR Aircraft are subject to US export licences is due to the number of aircraft components either wholly manufactured in the US or at least 10% manufacture-affiliated with the US.

Such sanctions have left all of Iran’s 14 registered commercial airlines operating an ageing, fragile fleet of passenger jets, and while flying on an older aircraft in the majority of the rest of the world is perfectly safe – (given constant maintenance, cockpit software updates, structural upgrades, etc) – in Iran, just being able to obtain spare parts is incredibly difficult.

IranAir

Despite both Airbus and ATR delivering few aircraft to Iran prior to the first layer of US sanctions returning this year,  the Iranian government have now announced they plan to file a lawsuit against ATR, for ‘breach of its contract to deliver all of the 20 ATR 72-600s’ ordered by Iran Air.

Tehran is accusing the company of “unnecessarily yielding to political pressure from the U.S.” Iranian officials say:  “ATR is obliged to either comply with its remaining commitments or pay compensations to Iran” Meanwhile in France, ATR has already started the process of “reallocating” the seven undelivered aircraft originally destined for Iran Air, which are now classed as ‘whitetails’ — an industry name for built aircraft without a customer airline.

While Airbus only delivered a tiny fraction of the agreed order, (due to the administrative complications of working with Iran) Tehran has not yet announced plans to sue Airbus for its failure to deliver the entire order of aircraft to Iran Air.

For Boeing, it’s a little different. The company never converted the agreements into firm orders, as they were allegedly warned that the Trump Administration could reinstate sanctions back on to Iran, which of course — they did. In light of this, the Iranian Government has already signalled its intention to sue Boeing for its decision to terminate contracts with Iranian carriers that include Iran Air, and Iran Aseman Airlines.

Final Thought

While Iran plans to sue multiple aircraft manufacturers over cancelled contracts, and worsening relations between the Iranian regime and the US, it’s worth highlighting that the need for newer aircraft in Iran was, and is a ‘very real’ need.

Nearly 2,000 Iranians have died in plane crashes since 1979. Just two months ago, in February 2018, another Iranian airliner went down over a mountain range in the province of Isfahan. Iranians have written to me, to share their fears of flying domestically, and their gratefulness to Europe’s aircraft manufacturers for delivering ‘at least some’ new aircraft.

Will Iran be able to take delivery of new aircraft anytime soon? Definitely not. Firm US Sanctions against the country are returning in phases, with the first phase already underway.  Despite the UK, France, Germany and China continuing to remain as members of the Joint Comprehensive Plan of Action, (more commonly known as the ‘Iran nuclear deal’), the US’ dominance puts an indefinite hold on Iran’s aviation industry for the foreseeable future.

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