The U.S. on Wednesday approved the $25 billion sale of Airbus planes to Iran, which will provide a much-needed refresh to an aging fleet long blocked from repair by international sanctions. The country struck a similar deal with American company Boeing, which awaits approval amid concerns from some that the planes could be used to support terrorism.
Although Airbus is a French company, it needed the U.S. Treasury Department to sign off before the deal for 118 planes could go through because they contain American parts. Some international sanctions were lifted last year with implementation of the Iran deal, which saw the country restrict its nuclear program in exchange for relief of nuclear-related sanctions.
But financial punishments imposed for Tehran’s other nefarious activity, like missile proliferation, support for international terrorism and human rights violations, remain in place. The country still cannot deal in dollars and businesses are wary of running afoul of U.S. regulations. These restrictions leave very few industries able to take advantage of the newly opened Iranian market.
Aviation exports is the largest industry able to benefit from the sanctions removal, and Iran’s fleet is in desperate need of repair. The country has 250 commercial planes, but as of June only 162 were flying because the rest needed new parts. Wednesday’s approval from the Treasury Department cleared the way for the sale of the first 17 planes to Iran Air, a state run airline.
“Their fleet is so decrepit,” said Matt McInnis, a resident fellow at the American Enterprise Institute. “It’s kind of terrifying how decrepit it is.”
Opponents of the nuclear agreement allege approving the aircraft sales will only allow Iran to use the planes to continue its support for terrorist organization Hezbollah in Lebanon and the regime of Bashar al Assad in Syria. But analysts say despite Iran’s history of bucking international regulation, it is unlikely Tehran will risk sacrificing its access to international aviation industries by violating the terms of the agreement, which stipulates the aircraft are to be used only for civilian purposes.
“I don’t have a lot of concern with that because there’s a range of ways in which planes themselves are monitored in their movements, between transponder information and plain old tail numbers,” said Richard Nephew, a former principal deputy coordinator for sanctions policy at the State Department. “When we were doing sanctions enforcement prior to the deal, we used tail numbers to track where flights were going … I think we’ll be able to track the planes no problem.”
But there is no guarantee the Iranians won’t try to use some of the aircraft for other purposes.
“It’s hard, once they’re inside the Iranian system, [to know] which airline is going to end up with these planes that have historically been used by the Islamic Revolutionary Guard Corps for being able to transport supplies, armaments, other capabilities to its proxy forces or allied forces or partners around the region,” McInnis said. “That’s been a huge concern by many people in the U.S. and elsewhere that this is going to, as a side aspect of this deal, improve Iran’s ability to transport covertly.”
It will take years for all of the planes to be delivered, with the $17.6 billion Boeing deal providing 80 aircraft between 2017 and 2025. The company expects its sale to be approved soon, but McInnis said he would be surprised if every plane is actually delivered.
If Iran begins using planes from either Airbus or Boeing for anything other than civilian aviation, that portion of the nuclear deal allowing the aviation sales can be revoked.
“The nuclear deal itself makes clear that this is a separable part of the sanctions relief,” Nephew said. “I find it hard to believe that Iran, with this pressing need it has for new planes, that it’s going to tempt fate.”
McInnis said the Iranians are also interested in studying the new aircraft with modern technology, as Tehran works to develop its own jet engine manufacturing. Success would mean no longer relying on foreign companies for aviation needs.
“The Iranians have absolutely no compunction about using U.S. or Western technology, ideas, capabilities, doctrines, whatever works. If it can be used for the furthering of their objectives it is absolutely legit,” McInnis said. “That’s completely blessed by the ayatollah.”
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