Premium #119 – IRAN – The Next Market Frontier for Commercial Aircraft

Recent geo-political events in Iran have led to hope that the economic sanctions, which began May 22, 1979 when President Jimmy Carter seized Iranian assets and have evolved since, may soon be loosened or ending. While there remains to be major progress on this front, after 20 plus years of sanctions on aircraft, the impact on Iranian airlines is now reaching a crisis level as aircraft age beyond the point of efficient maintenance.

Iran has become a country of interest for aerospace firms around the world.   The industry has been waiting and watching this market for decades, particularly as the sanctions have resulted in safety impacts that are well documented by ICAO

[1] and here and here. Iran has seen stable air traffic demand, even with a number of fatal accidents due to flying obsolete aircraft and a shortage of spares, as shown below.

The excitement among the aerospace industry it is being stirred because it appears that some sanctions may be lifted, leading to a large demand for modern aircraft after years of dealing with obsolete models, this will no doubt generate quite a bit of new business. Iran’s FARS news quotes Alireza Jahangirian, Iran’s Head of the Civil Aviation Organization, as saying “The National Development Fund of Iran has allocated $500 million to purchase new passenger planes, and initial agreement has been obtained for another $500 million to buy aircraft and related spare parts”.   Mr. Jahangirian has also been quoted as saying “Iranian airlines will be ready to buy 40 passenger planes every year for 10 years if sanctions are lifted.”