A row over US visa bans might further weaken Iranian President Hassan Rouhani’s efforts to attract foreign investors to Iran, particularly if it slows the implementation of deals for Western aircraft, officials and analysts said.
The deals struck last year for 80 Boeing jets and 100 from Europe’s Airbus are seen by Western investors as a crucial test as they seek business in Iran in the wake of the nuclear deal that led to the lifting of most sanctions.
People involved in the airline deals say it is too early to assess the impact of the US visa ban, but worry that hardening rhetoric in Tehran and Washington can only add to a list of complications that could slow, if not endanger, the jet sales.
While Airbus aircraft come from Europe, US President Donald Trump’s administration can veto the sale of all the airplanes to Iran because of the widespread use of US parts in the aircraft which need US export licenses.
The visa ban could also prolong a hiatus in talks about financing deliveries of jets, with European and Chinese banks reluctant to put up money to back Iranian jet purchases for fear of a backlash against their US operations.
“It will make people more nervous, more risk-averse, more inclined to wait and see,” said a senior Western financier, who asked not to be named.
Iranian officials say that even before Trump imposed restrictions on travel to the US from seven mainly Muslim countries, concerns about what the new US president might do had already put the brakes on post-sanctions business.
“The process has been very slow ... foreign investors were interested to work in Iran, but since Trump’s election the process has almost stopped. Investors are worried about possible US punishments if they work with Iran,” a senior official at the Iranian Ministry of Economy and Finance told reporters.
Final decisions on whether the airplane deals go ahead might well lie with Trump and Iran’s Supreme Leader Ayatollah Ali Khamenei, the ultimate broker in the country’s faction-ridden politics who has the last say on key matters.
For now, at least, Boeing appears comfortable that Trump will not automatically block its deal, although questions also remain over further approvals from Iran, two industry sources said.
Boeing and Airbus declined comment.
However, any long-term US travel curbs could also undermine the case for long-distance jets capable of linking Tehran with expat communities in cities such as Los Angeles. Boeing plans to start delivering its large 777 jets next year.
IranAir has already canceled orders for Airbus A380 “superjumbos,” initially meant to signal its ambitions to compete on equal terms with the hubs of Gulf rivals.
Besides the Boeing and Airbus orders, state airline IranAir is planning to buy 20 small Franco-Italian ATR turboprops to help expand economic development to smaller Iranian cities.
However, officials say a final deal has been held up due to uncertainty over some licenses for engines made by a Canadian subsidiary of Pratt & Whitney, the US’ top military engine maker and supplier to the colossal F-35 project.
Pratt & Whitney is seen to be wary of the political risks of dealing with Iran, especially with the F-35 project at the center of Trump’s criticism of aerospace firms for going over budget.
A Pratt & Whitney Canada spokesman said it was, “working closely with ATR to ensure all necessary licenses are in place prior to providing any products or services.”
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