Airbus and Boeing eager to accept promises from Iran to behave itself

Lenin famously said, "The Capitalists will sell us the rope with which we will hang them," and the mullahs of Iran are putting his dictum to work.  Billions of dollars and thousands of jobs are at stake, as Iran seeks to re-equip its fleet of airliners with at least 180 new birds, and Boeing and Airbus for a piece of the pie.  Adam Kredo reports in the Free Beacon:

Executives from major airplane manufacturers Boeing and AirBus will reportedly head to Iran next week to hammer down multi-billion dollar deals to sell the Islamic Republic a new fleet of commercial planes amid a congressional crackdown on Tehran's continued use of commercial aircraft to transport weapons and terrorist fighters across the region.

As controversy continues to swirl around Boeing's and AirBus's efforts to sell Iran a fleet of new jets, Congress has taken steps to mandate the U.S. government release public reports outlining Tehran's continued use of commercial aircraft for illicit terrorism purposes.

Boeing, whose principal law firm, Perkins Coie, served as a cutout in hiring Fusion GPS on behalf of the Democratic Party and the Hillary Clinton campaign, faces more difficulty in closing the deal than it would have if the campaign sabotage had been more effective in defeating Trump.

Included in the recently passed National Defense Authorization Act, or NDAA, a mammoth yearly funding bill for America's defense priorities, is a requirement that the U.S. government begin providing Congress with an annual report on Iran's use of commercial aircraft for illicit purposes.

The effort, lawmakers told the Free Beacon, is meant to highlight the danger of deals being pursued by Boeing and AirBus.

"Iran Air has been using their sanctions relief money from Obama's nuclear deal to fly weapons, material, and fighters directly into Syria," Sen. David Perdue (R., Ga.), the architect of the new effort, told the Free Beacon.

"We need a closer look into how Iran is propping up the murderous Assad regime," Perdue said. "As President Trump determines how it will proceed with regard to these commercial aircraft sales, a new reporting requirement included in the defense bill he signed into law today will help give us a better look at Iran's nefarious behavior."

Rep. Peter Roskam (R., Ill.), who spearheaded the reporting requirement in the House, told the Free Beacon that Boeing and AirBus executives should not be holding meetings with Iran's hardline regime.

"The reports of Boeing and Airbus executives traveling to Tehran to sell aircraft to the Iranian regime's airliner are outrageous," Roskam said. "In the past month, IRGC-backed forces have threatened to attack U.S. forces in Iraq and Iran's military leadership has threatened Europe with ballistic missiles. No American company should be doing business with this regime, let alone be selling militarily-fungible jets to the terror-supporting transport-arm of the IRGC."

The State Department would not directly comment on potential licenses that may or may not be granted to Boeing, but told the Free Beacon that Iran's use of commercial aircraft for terror purposes is extremely concerning.

It is hard to see what the mullahs could do to assuage this concern other than promise to be good boys.

The Trump administration will not grant any license to sell Iran commercial aircraft unless it can be concretely proven they will not be used for illicit operations.

"We do not comment on individual OFAC [Office of Foreign Assets Control] specific licenses, but the administration's position is clear: We will not issue export licenses unless we are convinced the aircraft will be used exclusively for civilian passenger aviation," a State Department official told the Free Beacon.

I suspect that Airbus might be willing to accept such promises.  In which case, expect massive protests over high-paying aircraft assembly jobs being shifted overseas to Airbus.

Of course, roughly a third of the value of an average Airbus commercial airliner comes from the United States.  Critical systems, such as avionics, are not available elsewhere in some cases.  The United States could theoretically embargo the sale of such components to Iran if push comes to shove.  But there would be blowback from that decision, possibly encouraging substitution of non-American components, even at the cost of performance.

Iran's civil aviation has suffered under the embargo that lasted until the Obama Iran deal shipped pallets of cash and freed up a hundred-plus billion dollars' worth of assets for use by Tehran.  Iran is a large country and needs airliners in order to carry on business and family life.  The Iranians have kept ancient airliners flying (and attracted foreign plane-spotters) by buying used parts on the aftermarket to keep them airworthy.  That is both expensive and risky.  Cranky Flier is but one of many aviation buffs who have made fun of the vintage of Iran's fleet and the promise of new planes:

The economics of airliner manufacturing makes extra volume very profitable.  Once the fixed development costs have been recouped, and as the per plane costs of manufacturing decline ("the "experience curve") with increasing volume, additional sales become highly lucrative.  Iran is likely to buy airliners already in wide use and therefore especially profitable for the manufacturers.

Keep your eyes on this drama.  And remember that Boeing makes billions off of national defense in addition to its commercial airliner business.  More threats mean more defense business, and unless the mullahs are trustworthy, more airliners for Tehran means more threats.  In other words, a booming market in rope, as Lenin put it.

Hat tip: Bryan Demko

Lenin famously said, "The Capitalists will sell us the rope with which we will hang them," and the mullahs of Iran are putting his dictum to work.  Billions of dollars and thousands of jobs are at stake, as Iran seeks to re-equip its fleet of airliners with at least 180 new birds, and Boeing and Airbus for a piece of the pie.  Adam Kredo reports in the Free Beacon:

Executives from major airplane manufacturers Boeing and AirBus will reportedly head to Iran next week to hammer down multi-billion dollar deals to sell the Islamic Republic a new fleet of commercial planes amid a congressional crackdown on Tehran's continued use of commercial aircraft to transport weapons and terrorist fighters across the region.

As controversy continues to swirl around Boeing's and AirBus's efforts to sell Iran a fleet of new jets, Congress has taken steps to mandate the U.S. government release public reports outlining Tehran's continued use of commercial aircraft for illicit terrorism purposes.

Boeing, whose principal law firm, Perkins Coie, served as a cutout in hiring Fusion GPS on behalf of the Democratic Party and the Hillary Clinton campaign, faces more difficulty in closing the deal than it would have if the campaign sabotage had been more effective in defeating Trump.

Included in the recently passed National Defense Authorization Act, or NDAA, a mammoth yearly funding bill for America's defense priorities, is a requirement that the U.S. government begin providing Congress with an annual report on Iran's use of commercial aircraft for illicit purposes.

The effort, lawmakers told the Free Beacon, is meant to highlight the danger of deals being pursued by Boeing and AirBus.

"Iran Air has been using their sanctions relief money from Obama's nuclear deal to fly weapons, material, and fighters directly into Syria," Sen. David Perdue (R., Ga.), the architect of the new effort, told the Free Beacon.

"We need a closer look into how Iran is propping up the murderous Assad regime," Perdue said. "As President Trump determines how it will proceed with regard to these commercial aircraft sales, a new reporting requirement included in the defense bill he signed into law today will help give us a better look at Iran's nefarious behavior."

Rep. Peter Roskam (R., Ill.), who spearheaded the reporting requirement in the House, told the Free Beacon that Boeing and AirBus executives should not be holding meetings with Iran's hardline regime.

"The reports of Boeing and Airbus executives traveling to Tehran to sell aircraft to the Iranian regime's airliner are outrageous," Roskam said. "In the past month, IRGC-backed forces have threatened to attack U.S. forces in Iraq and Iran's military leadership has threatened Europe with ballistic missiles. No American company should be doing business with this regime, let alone be selling militarily-fungible jets to the terror-supporting transport-arm of the IRGC."

The State Department would not directly comment on potential licenses that may or may not be granted to Boeing, but told the Free Beacon that Iran's use of commercial aircraft for terror purposes is extremely concerning.

It is hard to see what the mullahs could do to assuage this concern other than promise to be good boys.

The Trump administration will not grant any license to sell Iran commercial aircraft unless it can be concretely proven they will not be used for illicit operations.

"We do not comment on individual OFAC [Office of Foreign Assets Control] specific licenses, but the administration's position is clear: We will not issue export licenses unless we are convinced the aircraft will be used exclusively for civilian passenger aviation," a State Department official told the Free Beacon.

I suspect that Airbus might be willing to accept such promises.  In which case, expect massive protests over high-paying aircraft assembly jobs being shifted overseas to Airbus.

Of course, roughly a third of the value of an average Airbus commercial airliner comes from the United States.  Critical systems, such as avionics, are not available elsewhere in some cases.  The United States could theoretically embargo the sale of such components to Iran if push comes to shove.  But there would be blowback from that decision, possibly encouraging substitution of non-American components, even at the cost of performance.

Iran's civil aviation has suffered under the embargo that lasted until the Obama Iran deal shipped pallets of cash and freed up a hundred-plus billion dollars' worth of assets for use by Tehran.  Iran is a large country and needs airliners in order to carry on business and family life.  The Iranians have kept ancient airliners flying (and attracted foreign plane-spotters) by buying used parts on the aftermarket to keep them airworthy.  That is both expensive and risky.  Cranky Flier is but one of many aviation buffs who have made fun of the vintage of Iran's fleet and the promise of new planes:

The economics of airliner manufacturing makes extra volume very profitable.  Once the fixed development costs have been recouped, and as the per plane costs of manufacturing decline ("the "experience curve") with increasing volume, additional sales become highly lucrative.  Iran is likely to buy airliners already in wide use and therefore especially profitable for the manufacturers.

Keep your eyes on this drama.  And remember that Boeing makes billions off of national defense in addition to its commercial airliner business.  More threats mean more defense business, and unless the mullahs are trustworthy, more airliners for Tehran means more threats.  In other words, a booming market in rope, as Lenin put it.

Hat tip: Bryan Demko