This ATR reported success with an order for 40 ATR72-600s to Iran Air.

atr_72_600_iranair_1377The deal includes firm orders for 20 aircraft plus 20 options, and is valued at one billion euro.  Interestingly the deal was signed in Tehran, not Paris or Toulouse.  Italian and French states played an important role to the signing of this deal through the participation of their export credit agencies, respectively Sace and Coface.

So another French win after last week’s blockbuster Airbus deal.  Iran is doing these deals using export credits to ensure the maximum value is extracted from the seller’s side.  This means that should there be sanctions again, it has not paid cash and minimized its risk.  The French and Italian taxpayers are on the hook.  Were Iran to behave as it has in the past, it becomes much harder to reimpose sanctions by France and Italy.

As we stated last week, we believe Iran will buy from every OEM to ensure it spreads its commercial largess.  This ties as many nations and firms as possible to its economy.  The more widespread the deals, the harder it makes any renewal of sanctions.  All of which signals very clever and rational moves by Iran.  But does it also signal an intent to test western governments with more belligerence and meddling via military proxies?

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