Iran Buys Russian Sukhoi As Boeing Delays 777 Jetliner Delivery

April 26, 2018

Iran Air Tours, a subsidiary of Iran Air, the country’s flagship carrier, has announced that it has bought 20 Sukhoi Superjet 100 (SSJ100) passenger planes from Russia. The airline will take delivery of the first few 100-seaters next year. It will add the rest gradually to its fleet in the coming years.

Russia’s Deputy Industry and Trade Minister, the managing director of Sukhoi Company, the managing director of Iran Air Tours and its owner signed the $1 billion contract in Antalya, Turkey, according to the Tasnim News Agency. It is unclear how the airline plans to pay for the 20 aircraft. Iran is reportedly paying $50 million for each SSJ100 — twice the normal pricetag.

“Sukhoi has modified the aircraft by reducing the number of American-made parts to less than 10 percent. This means that the company doesn’t need to obtain a permit from the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) to sell the aircraft to Iran,” said Assadi Samani, the secretary of the Associations of Iranian Airlines. “Many of our airports have not been in use because they cannot accommodate large passenger planes. But the 100-seat SSJ100 will connect all of these small airports. After passing the necessary tests, the aircraft will be issued the flight permit.”

Some experts believe that it was a wrong decision to buy the SSJ100. They point out that its safety record is not nearly as impressive as the American Boeing and the French Airbus. Russia’s largest airline, Aeroflot, suspended all SSJ100 flights in December 2016 due to a massive mechanical failure. In 2017, Russian President Vladimir Putin promised to deliver a fleet of passenger planes to Iran and to build an aircraft manufacturing plant in the country. That, however, never happened.

In December 2016, the chairman of the Iran-Russia Chamber of Commerce, Asadollah Asgaroladi, said: “We were ready to buy Sukhoi passenger planes, but Russia would not sell them to us.” Mr. Asgaroladi told senior officials that Russia was not eager to invest in Iran.

Meanwhile, Boeing has delayed the delivery of three 777 jetliners to Iran as U.S. President Donald Trump threatens to withdraw from the Joint Comprehensive Plan of Action (JCPOA), better known as the Iran nuclear deal. 

“We have no Iranian deliveries that are scheduled or are part of the (production) horizon this year, so those have been deferred in line with the U.S. government process,” Boeing CEO, Dennis Muilenburg said in a conference call with the Reuters news agency. “I can tell you with confidence that we have continued to build risk mitigation into our 777 production plan.”

Mr. Muilenburg explained: “Boeing is no longer as concerned as it once was that a collapse of the deal could force it to cut production of the 777 jetliner, threatening hundreds of jobs, due to a pickup in demand. We would not have to trim production of the 777 any further even if Iran were unable to take any deliveries of the $347 million jet. The production rate that we have put in place is not dependent on the Iranian orders.”

Muilenburg noted: “If those orders come to fruition, if we do ultimately deliver airplanes, they represent opportunities, for us but we are going to follow the U.S. government’s lead and we have ensured that … we are not dependent on those aircraft.”

In December 2016, Boeing agreed to sell 80 aircraft to Iran Air under a deal between Tehran and major world powers to reopen trade in exchange for curbs on Iran’s nuclear activities.