Airline battle brews in Gulf as Iran eyes regional hub role

Thu Feb 4, 2016 2:11am EST
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By Tim Hepher and Nadia Saleem

PARIS/DUBAI (Reuters) - An economic battle is likely for dominance of the skies over the Gulf after Iran decided to invest $27 billion in an airline fleet capable of taking on the region's supercarriers.

By ordering dozens of long-distance European jets last month after the lifting of sanctions, Iran is positioning Tehran as a potential long-term transit point between East and West to rival regional hubs such as Dubai, air officials and analysts say.

The move is underscored by Tehran's choice of Airbus A380, which is the world's largest jetliner and is used by other Gulf carriers, and sends a political warning to Iran's neighbours not to ignore the Islamic Republic's emergence from isolation.

"Certainly this is our historical position: we have always been a center for communications in the region," Transport Minister Abbas Akhouni said in an interview.

The investment also points to a strategy to take part in the globalization of the transport industry alongside Gulf rivals, even though the social and economic challenges of building a world-class hub are formidable for Iran.

"We used to be a very important airline in the region and globally, so of course we want to play our role fully once again," Iranair Chairman Farhad Parvaresh told Reuters.

Iran signed a deal for 118 Airbus jets, and contracts to expand the main Tehran airport, during a visit to Europe by President Hassan Rouhani, less than two weeks after sanctions were lifted in exchange for curbs on Iran's atomic program.

Not all the planes are expected to go to Iranair, but Tehran says it will give the flag carrier priority.   Continued...

An Airbus A380 is seen on the production line at Airbus headquarters in Toulouse, in this January 13, 2011 file photo. REUTERS/Philippe Wojazer/Files