Boeing nears historic deal with Iran for about 100 jetliners

By Julie Johnsson, Golnar Motevalli, Kambiz Foroohar

The planemaker has held discussions with Iranian airlines about buying commercial planes. Photo / Getty Images
The planemaker has held discussions with Iranian airlines about buying commercial planes. Photo / Getty Images

Iran is preparing to unveil a historic agreement for Boeing jetliners within days that could be valued at about $25 billion (NZ$50 billion).

The transaction would be the first struck by the planemaker since sanctions were lifted in January and would require US government approval. An order listed at $27 billion announced by Europe's Airbus Group also needs a US. Treasury Department license before it can be finalized. Buyers typically negotiate discounts from list prices.

Boeing is poised to land a comparable deal if the US company can navigate the appropriate government permissions, Chief Executive Officer Dennis Muilenburg said in a June 3 address to the Bernstein Strategic Decisions Conference in New York.

"You can anticipate that that's potentially a 50-50 kind of marketplace for Boeing and Airbus, and we're going to battle it out competitively," Muilenburg said. Referring to Airbus's 118-plane order, "we see market space that's measured in that category," he said.

Minister Abbas Akhoundi in an address to Parliament referred to a Boeing agreement "within the coming days," according a statement Monday on the Ministry of Roads and Urban Development website.

He said the country needs to invest about $50 billion (NZ$71 billion) to bolster its fleet with 400 mid- and long-range jetliners and 100 short-haul planes.

Boeing shares rose less than 1 per cent to $130.11 at 1:35 pm in New York, bucking declines across major stock indexes.

The planemaker has held discussions with Iranian airlines "about potential purchases of Boeing commercial passenger airplanes and services," spokesman Tim Neale said by email.

"We do not discuss details of ongoing conversations we are having with customers, and our standard practice is to let customers announce any agreements that are reached," he said.

Chicago-based Boeing faces risks as it vies with Airbus and others to replace Iran's museum-piece fleet. A deal could spark political backlash, given Iranian leaders' penchant for anti-US and anti-Israeli rhetoric.

Boeing also may need to leave wiggle room to back out of any potential orders if the next US president decides to reinstate sanctions.

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