Iran Nuclear Deal Cancellation Fails To Dent Boeing and Airbus
Although the U.S. cancellation of the nuclear agreement with Iran will likely tank big airliner orders from Iran, neither Airbus nor Boeing seem likely to be immediately damaged, according to industry sources. That’s because the Iranian orders were of questionable firmness and were far in the future with uncertain financing.
Between the two aerospace giants, the orders totaled $39 billion. IRAN Air and Iran Aseman Airlines had 100 Airbus aircraft on order while Boeing had secured orders valued more than $16 billion after the Obama Administration lifted sanctions on the malign country in 2016. Iran Air's agreement with Boeing included 15 orders for wide-body 777-9s and 15 of 777-300ERs.
According to industry experts, both companies anticipated trouble with the Iranian airlines’ ability to finance the aircraft, as well as uncertainty about the political arrangement remaining in place. Teal Group’s Richard Aboulafia told NPR this week that as a result, neither company had logged the orders as hard business.
Boeing ended the first quarter of this year with a backlog of more than 5800 airplanes, including more than 4600 orders for 737s. The company's current production remains unaffected, according to CEO Dennis Muilenburg. Airbus has 7100 aircraft in its order books, claiming it's producing at capacity for the next nine years, according to an Airbus spokesperson.
One of the biggest incentives for Tehran with lifted sanctions had been to reach new deals with the U.S. and Europe. Airplanes used by airlines in Iran are among the oldest in the industry. Iranian officials estimate a need for up to 500 passenger jets in the coming years. Boeing’s stock price actually rose on the news Tuesday, but dipped slightly on Thursday. Airbus stock dipped sharply on Tuesday, but recovered most of the lost ground by late Friday.