US President Donald Trump has pulled the US out of a landmark nuclear deal with Iran prompting protests from allies and Iran. The Brent crude oil price has spiked on the news – reaching almost $77 per barrel today despite Saudi Arabia’s promises to increase production.
Analysts are busy dissecting what this move means for the sales of airplanes to Iran from both Boeing and Airbus. The prevailing opinion for Boeing at least is that its conservative approach to business with Iran has served it well and disruption will be minimal, with some reports suggesting the company has already found customers for some of the 777-300ERs earmarked for Iran Air, which intended to order 15 777s and 15 777X aircraft.
The renewal of US sanctions on Iran will impact Airbus aircraft on order with Iran also, which feature many US-manufactured parts and engines. In December 2016, Airbus booked firm orders with Iran Air for 46 A320-family aircraft, 16 A350s and 28 A330neo. The airline took delivery of its first A321 in January 2017 and an A330-300 in March 2017. Other Iranian carriers followed with MOUs from Zagros Airlines for 20 A320neo and eight A330neo aircraft, and Iran Airtour Airlines for 45 A320-family aircraft, both signed at the Paris Air Show. ATR signed a deal with IranAir in April 2017 for 20 72-600s. These lost aircraft deals are estimated to total $40bn in lost sales for the manufacturers.
Tearing up the Iranian deal is predicted to impact aluminium prices, which are already under pressure from President Trump’s decision to enact aluminum tariffs, resulting in a double whammy for manufacturers.