Boeing bags IranAir deal by giving 50% discount

Following the partial lifting of U.S. led sanctions, Iran presents itself as a huge economic opportunity. While Boeing’s deal has been made possible by outgoing U.S. President Barrack Obama, President-elect Donald Trump is a huge critic of the U.S-Iran nuclear deal.

Following partial lifting of U.S. led sanctions, Boeing as well as its European rival Airbus have signed huge contracts to supply airplanes to Iran.

Iran has now stated that it has negotiated to pay $16.6 billion for 80 new Boeing airliners from Boeing.

The race to replace Iran’s outdated civil aviation fleet has become one of the biggest economic opportunities following the 2015 accord to lift sanctions negotiated by outgoing U.S. President Barack Obama. However, U.S. President-elect Donald Trump has been a very vocal critique of the deal.

The placing of such huge order by Iran come in the wake of the aerospace market facing a downturn in orders and are thus forced to offer steep discounts to bag further orders.

Case in point, this month, Boeing had reported that it was cutting the production of its 777 long-haul aircraft due to a drop in demand.

“Boeing has announced that its IranAir contract is worth $16.6 billion. However, considering the nature of our order and its choice possibilities, the purchase contract for 80 Boeing aircraft is worth about 50 percent of that amount,” said Asghar Fakhrieh-Kashan, Iran’s Deputy Transport Minister.

When asked to respond to requests for comments, Boeing’s spokesman in Dubai was not available for comment.

Significantly, Fakhrieh-Kashan has also stated that IranAir may exercise the option to buy 20 more aircrafts from European manufacturer ATR, in addition to placing a firm order of 20 aircrafts.

Officials from ATR are scheduled to visit Tehran next week to finalise the deal.

“The final round of talks will be held with ATR representatives (next) week and we expect the IranAir contract to be signed … in the following week,” said Fakhrieh-Kashan.

“The purchase of 20 planes has been finalised and Iran may buy 20 more planes,” said Fakhrieh-Kashan, adding that the contract for 20 planes was worth less than $500 million.

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Categories: Economy & Finance, Entrepreneurship, Geopolitics, HR & Organization, Regulations & Legal, Strategy

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1 reply

  1. Wonder how much of the covert ‘O’ money smuggling operation was use in the deal. And now that Iran has a global reach with transoceanic econobombs where is Boeing going to move to make the profit margin; Mexico, Brazil, China reeducation camps.

    Like

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