Iran completes long-awaited aircraft deal worth $536 Million for 20 ATR Turboprop Aircraft

ATR 72 Iran Air
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European turboprop manufacturer ATR sealed a long-awaited deal with Iran Air worth $536 million at list prices, making it the latest aerospace company to benefit after a nuclear accord eased international restrictions on trade with the Middle Eastern state.

Iran Air will take 20 ATR 72-600 aircraft and has options for 20 more, ATR spokesman David Vargas said by telephone Thursday. The first plane from the joint venture of Airbus SE and Leonardo SpA is due for delivery “within weeks,” with all scheduled to have been handed over by the end of 2018, he said.

Iran is splurging on new aircraft after economic sanctions stopped the nation of 80 million people from renewing its fleet for several years, making the average age of its planes one of the highest in the world and pushing up accident rates.

Turboprop models generally serve smaller airports often inaccessible to bigger jet aircraft — a requirement that’s particularly acute in a country with such mountainous terrain. Beyond the current deal, Iran should also “provide a lot of opportunities for replacement and growth,” Vargas said.

The purchase from ATR, as Avions de Transport Regional is known, was held up as U.S. manufacturer Pratt & Whitney sought permission to export PW100 engines for the aircraft. Vargas said ATR had obtained a license from the U.S. Treasury’s Office of Foreign Assets Control allowing the deal to go ahead.

Iran Air has already taken delivery of Airbus A320 and A350 planes from a $19 billion accord and is awaiting its first Boeing Co. aircraft under a $16.6 billion deal. The U.S. company last week signed a further $3 billion accord to supply 30 737 Max planes to Iran Aseman Airlines, though it’s not clear if President Donald Trump’s administration will query the sales or wave them through.


Reuters
* IranAir already has deals with Boeing, Airbus
    * Talks required navigating U.S. sanctions still in place
    * First ATR could be delivered in days

 (Adds background, details, deputy minister interview)
    By Tim HepherPARIS, April 13 (Reuters) - Iran secured a contract with a
third Western aircraft supplier on Thursday since the easing of
sanctions by completing a deal to buy 20 regional turboprops
from Europe's ATR, part of an effort to modernise the nation's
creaking fleet.
    After months of talks that required navigating a way through
separate U.S. sanctions and regulations still in place, ATR and
Iranian officials said the contract with national carrier
IranAir was signed in Tehran.
    Iran initially announced the signing on Monday, but ATR said
at the time elements were still being finalised. [nL8N1HI0RT]
    The first plane in the deal may be dispatched in days from
the ATR factory in Toulouse, France, where it has been sitting
for months. It will be joined in coming weeks by three further
aircraft already painted in IranAir colours.
    Jointly owned by Airbus <AIR.PA> and Italian company
Leonardo <LDOF.MI>, ATR said the deal was worth $536 million at
list prices and included options for a further 20 aircraft.
Commercial aircraft are typically sold at a discount.
    It follows deals between IranAir and plane giants Airbus and
Boeing for 180 passenger jets, the first three of which - built
at Airbus factories in Europe - have already been in delivered.
    Iran wants to reopen for business after decades of
sanctions. Under a 2015 agreement between Tehran and world
powers, Iran secured an easing of sanctions in exchange for
curbs on its nuclear technology programme.
    The 70-seat ATRs are expected to serve secondary cities
inside Iran, as the government of President Hassan Rouhani
showcases the results of the nuclear deal in traditionally
hardline voting areas before a May presidential election.
    Hardline Iranian media and some prominent hardline figures
have criticised the plane deals as a waste of resources at a
time of continued hardship for many Iranians.

    FINANCING CHALLENGES
    Rouhani, who is expected to seek re-election, has also faced
criticism about the pace of economic recovery from Supreme
Leader Ayatollah Ali Khamenei and his hardline allies, who want
to regain the presidency in May.
    Iran's fleet renewal continues to be hampered by the
reluctance of many Western banks to take part because of U.S.
funding restrictions that are not covered by the nuclear deal.
    Deputy Roads and Urban Development Minister Asghar
Fakhrieh-Kashan told Reuters by telephone that Iran was making
progress in lining up long-term finance.
    Industry sources said potential financiers for Iran's
aircraft deals included UAE-based leasing company Dubai
Aerospace. They also said Iran had held talks with European and
Chinese companies.
    Iran was paying cash for its first few aircraft but these
payments would be considered deposits for future deliveries once
financing was in place, Fakhrieh-Kashan said, adding that ATR
had offered to finance eight planes if other funding was not
found.
    The deal was finalised after a hitch caused by uncertainty
about whether engine maker Pratt & Whitney Canada, a unit of
U.S. firm United Technologies <UTX.N>, needed separate U.S.
export licences to provide spares and long-term maintenance.
    ATR agreed to provide support until the issue was resolved,
Iranian officials said. Pratt & Whitney Canada declined to
comment.

 (Editing by Sudip Kar-Gupta and Edmund Blair)
 (([email protected]; +33 1 49 49 54 52; Reuters
Messaging: [email protected]))

Keywords: ATR AIRCRAFT/ (UPDATE 2)

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