One of the clearest signs yet that Iran is coming in from the cold and integrating back into the world economy, Iran Air has agreed to purchase 118 passenger jets from Airbus, the European aerospace and defense conglomerate.
With a total price tag of approximately $25 billion, Iran Air is the first airline from Iran to enter into a purchase agreement following the lifting of most international sanctions less than two weeks ago. Iran’s aviation industry has been dogged for years by sanctions and inadequate access to new aircraft, parts, training, ground equipment and other resources, all of which have led to poor safety ratings among domestic airlines and numerous fatal accidents.
Included in the order are 21 standard-model A320s, 24 A320neo aircraft (Airbus’s newer fuel-efficient A320 model), 27 A330s, 18 A330-900s, 16 A350-1000s, and, most notably, 12 A380s. Not only will the addition of these aircraft to Iran Air’s fleet greatly reduce its average age, but they will possibly be one of the first tangible results of the cessation of sanctions that Iranian citizens (or at least fliers) will get to experience.
With a population of nearly 80 million, many of whom are well-educated and under the age of 35, Iran is one of the last major untapped economies in the developing world. This is especially true for American and European firms that have stayed away due to international sanctions imposed on the country over the last two decades.
Given the track record and trajectory of Iran Air and other domestic carriers’ Gulf and Turkish rivals such as Emirates, Etihad, Qatar Airways, and Turkish Airlines, it will be very interesting to see how Iranian airlines modernize and amenitize their fleets and services. Although the potential is massive to quickly ramp up service and quality in the face of steep Middle Eastern competition, there are numerous hurdles that stand in the way including outdated aviation infrastructure, lack of advanced pilot training, old air traffic control systems, antiquated maintenance and repair services, and a lack of regulatory and safety standards. It will be some time before Iran Air and others such as Mahan directly compete with Emirates et al, but that day is surely welcomed by many (myself included!).
Although Iran Air’s purchase of Airbus aircraft may not yet impact those of us who churn credit cards to travel the world on miles and points, maybe one day in the not too distant future the airline and other domestic carriers can join the likes of Star Alliance, Oneworld, and or Skyteam. Who knows, maybe in 2020 (but hopefully sooner!) you’ll be redeeming you Chase Ultimate Rewards (UR) and United Miles for a flight from SFO to Tehran via Istanbul on Iran Air!
Now if only we could restore diplomatic relations with the Iranian government, clean up the Iran’s aviation safety and maintenance issues, and establish direct flights to the US… Wouldn’t that be a trip! LAX direct to IKA. We can only hope!
Sources: Financial Times, Airbus
