Bizarre blowback as corporations ponder the end of Iran sanctions

Among the many big corporations salivating at the prospect of the relaxation of sanctions against Iran, assuming some sort of deal is reached (no matter how inadequate), Boeing and Airbus are in the forefront.  Iran is a geographically large country that needs an internal air travel network, and should its trade skyrocket with the diminishing of sanctions, it will also need a large fleet of intercontinental airliners to meet demand.  The head of Iran Air has spoken of an order for 100 wide body airliners.

For decades, Iran has kept flying aircraft models that have all but disappeared from the skies elsewhere, including early-model Boeing 747s and Airbus A300s.  These airplanes not only burn more fuel than contemporary models, but require a lot of expensive maintenance to keep airworthy.

But in a disturbing article by Reuters reporters Tim Hepher, Parisa Hafezi, and John Irish, we learn that Airbus, the European consortium headquartered in France, may be punished for France’s hard line at the Vienna talks.

Boeing appears best placed to take advantage of the first wave of sales, partly because France, which is home to Airbus and owns 11 percent of the firm, took a particularly hard line with Iran in the nuclear talks, according to industry sources, diplomats and people familiar with Iranian thinking.

Paris has become more hawkish toward Tehran in recent years as France aligns itself with Shi'ite Iran's Sunni rivals across the Gulf, Qatar and Saudi Arabia.

"The position of the French, particularly (foreign minister Laurent) Fabius, has not made things easy for Airbus," said a European aviation industry source, asking not to be identified.

Iran's transport minister last month warned France it risked missing out on $80 billion worth of business unless it changed its stance towards Tehran.

A French Senate panel recently expressed concerns that local firms were falling behind in the race to Tehran.

"Being the first one in doesn't mean you'll be the first served," responded a senior French government official. "We'll be ready. Don't worry about our firms," he told Reuters.

Iran Air's Parvaresh also told Reuters last year that Iran would give preference to suppliers who had cooperated during a window for sanctions relief that opened up in 2014.

Boeing said in October it had sold aircraft manuals, drawings, charts and data to Iran Air in its first acknowledged dealings since the 1979 hostage crisis that wrecked U.S.-Iranian relations and triggered a U.S. boycott.

For decades, European firms, especially French ones, have beaten U.S. competitors to export markets where U.S. sanctions are in place.  It would be ironic in the extreme if Boeing, a huge U.S. defense contractor, were to gain advantage over Airbus due to the French government’s vigilance against Iranian nuclear proliferation dangers.  

In the age of Obama, up is down.

Hat tip: Bryan Demko

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