Boeing signs $25 billion deal with Iran Air

dubai - Iranian airlines have some 60 Boeing airplanes in service, but most were purchased before 1979

Boeing said on Tuesday it signed an agreement with Iran Air "expressing the airline's intent" to buy its aircraft - the Islamic Republic's first major deal with an American company following its landmark nuclear accord last year with world powers.

It's unclear how much the agreement with Iran Air would be worth, though an Iranian official earlier suggested the total Boeing sale to the Islamic Republic could be valued at $25 billion.

The Chicago-based manufacturer issued a statement to AP saying that it signed the Iran Air agreement "under authorisations from the US government following a determination that Iran had met its obligations under the nuclear accord reached last summer."

"Boeing will continue to follow the lead of the US government with regards to working with Iran's airlines, and any and all contracts with Iran's airlines will be contingent upon US government approval," it said.

Iran Air, the country's national carrier, said this week it wants to buy new generations of the Boeing 737, as well as the 300ER and 900 version of the Boeing 777.

Earlier on Tuesday, Iran's Transportation Minister Abbas Akhoundi said a possible deal between the Islamic Republic and Boeing could be worth $25 billion, on par with the country's earlier deal with its European rival, Airbus.

"The initial talks were held and I can say Boeing is negotiating with the US officials and possibly the amount of our purchase is equal to Airbus," Akhoundi said.

If the deal goes through, he said the first Boeing plane could arrive in Iran in October.

The overall size of the proposed Boeing sale to Iran remains unclear. Ali Abedzadeh, the head of Iran's Civil Aviation Organisation, was quoted on Sunday by the state-run Iran newspaper as saying the sale would involve 100 Boeing aircraft.

Boeing has been cautious about entering Iran's market as other sanctions remain in place against Tehran. American officials had said as recently as last weekend that the sale would need permission from the US Treasury.

It is likely Boeing may run the sale through an overseas subsidiary and use a currency other than US dollars in order to avoid running afoul of American laws.

Iranian airlines have some 60 Boeing airplanes in service, but most were purchased before 1979.

Out of Iran's 250 commercial planes, 162 are flying while the rest are grounded due to lack of spare parts, Akhoundi said on Tuesday. Parts and servicing remained nearly impossible to get while the world sanctioned Iran over its contested nuclear programme.

Included in last year's nuclear deal is approval for airline manufacturers to enter the Iranian market. However, American lawmakers have warned Boeing not to do business there as the Iran deal remains a hot topic in the ongoing presidential election.

Iran Air previously signed agreements to buy 118 planes from the European consortium Airbus and 20 more from French-Italian aircraft manufacturer ATR. The Airbus deal alone was worth ?22.8 billion ($25 billion). - AP