Infratil's Manston airport in Kent, England, has stopped refuelling Iran Air flights in the face of US sanctions that had spurred fuel suppliers at Heathrow to refuse to deal with the state-owned airline.

The US imposed sanctions on Iran amid suspicions the Middle Eastern state was developing nuclear weapons under the guise of a civilian nuclear power programme. Voice of America reported on June 28 that the US toughened the sanctions, imposing new penalties on Iran Air because it was concerned the airline may be carrying military payloads for the Iranian regime.

Iran Air flights have been allowed to continue using Heathrow but were forced to fly on to Manston for fuel for return journeys to Iran.

Steve Fitzgerald, head of Infratil's European Airports division that includes Manston and Glasgow Prestwick, said the company had checked with British authorities that the fuel sales didn't breach any laws.

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The decision to cease fuel sales was "a commercial, judgmental decision," Fitzgerald said. "There's concern among governments that dealing with Iran at the moment is sensitive."

"Iran Air was advised a week ago that Kent International Airport is no longer willing to supply them with fuel," he said.

The Iran Air fueling arrangements with Manston were picked up by British media including the BBC and the tabloid Daily Mail Online. They come amid a deepening diplomatic rift between the UK and Iran, after protesters stormed the British embassy in Tehran. The UK responded by expelling Iranian diplomats.

A spokesman for New Zealand's Ministry of Foreign Affairs and Trade couldn't immediately comment on the situation.

Sales of jet fuel through Manston were not large enough to breach the sanctions anyway, Fitzgerald said. They restricted fuel sales exceeding US$1 million per transaction and at Manston, the value was well below that, with each sale being for 10s of thousands of litres, he said.

The decision to stop the fuel sales was "based on a view that this was the right thing to do," he said.

Infratil's European Airports posted an EBITDAF loss of 1.8 million pounds in the six months ended Sept. 30, narrowing from a loss of 2.2 million pounds a year earlier.

Infratil's shares rose 0.3 percent to $1.815 on the NZX today and have slipped 6 percent this year.

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