Hurdles remain as Iran seeks aviation investment

Tue Jan 26, 2016 5:09am EST
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By Tim Hepher

TEHRAN (Reuters) - Iran courted Western aviation firms this week with a blueprint of regulatory reforms aimed at setting aside 40 years of sanctions and rebuilding its airways with new jets.

But despite talk of a major plane order from Airbus (AIR.PA: Quote), a raft of legal, financial and regulatory hurdles remain as Iran seeks foreign investor backing for plans to overhaul its dilapidated aviation sector.

"We are seeing massive opportunities in Iran," said Peter Harbison, chairman of the Centre for Aviation (CAPA), an Australian consultancy, adding that Tehran needed funding, organization and manpower to do everything its airlines intend.

"Without each of those ingredients, the growth is going to be much less than optimal," he said after chairing a major Tehran aviation conference.

A shopping list for over $20 billion of Airbus jets carried to Europe by Iranian President Hassan Rouhani this week is seen as a test case for post-sanctions trade because of the sums involved and state-of-the-art financing used in the jet market.

Although Boeing jets are not involved, completing the Airbus deal depends on the approval of the U.S. Treasury, which must approve sales to Iran of jets with over 10 percent U.S. parts.

Even then, Iran must work out how to pay for the jets, delegates at the Iran Aviation Summit organized by CAPA said.

Iran on Monday urged Washington to remove any lingering obstacles to implementation of the accord under which sanctions were lifted in return for curbs on its nuclear activities.   Continued...

Iran President Hassan Rouhani arrives to meet with Italian Prime Minister Matteo Renzi (not seen) at the Campidoglio palace in Rome, Italy, January 25, 2016.  REUTERS/Alessandro Bianchi