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June 19, 2024
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The blockbuster deal Iran and Airbus made recently has yet to be concluded.  The reason?  The US Office of Foreign Assets Control (OFAC) can block the deal because more than 10% of components in Airbus planes are of American origin.

Understanding the role of OFAC is important in figuring out how the Iran deal could work.  The US Treasury has a long running issue with western aviation assets (link; link) that are in Iran.  The US Treasury has already attempted to stretched its will across the Atlantic.  As the last link shows, this had been utterly ineffectual.

But keeping the US banking system and other suppliers wary of large fines and legal trouble has had a chilling effect on getting the Airbus deal with Iran done.  This is frustrating Airbus.  And if it is frustrating Airbus, it becomes easier to understand why we have seen no movement by Iran with Boeing.

Public policy is easier to create than remove.  It may be a while before we see any big fleet renewals happening in Iran.  Meanwhile Iran keeps acquiring aircraft piecemeal.

 

author avatar
Addison Schonland
Co-Founder AirInsight. My previous life includes stints at Shell South Africa, CIC Research, and PA Consulting. Got bitten by the aviation bug and ended up an Avgeek. Then the data bug got me, making me a curious Avgeek seeking data-driven logic. Also, I appreciate conversations with smart people from whom I learn so much. Summary: I am very fortunate to work with and converse with great people.

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