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 Iran and six world powers were struggling on Friday to remove the
last obstacles to an historic deal in Vienna that could resolve a
more than 12-year dispute over Tehran's nuclear ambitions, extending
talks through the weekend.
For Tehran, the prospect of sweeping economic sanctions and a
long-standing U.S. trade embargo being lifted represents a chance to
renew a fleet whose average age of 23 years is almost twice the
international average, and to do so at affordable prices, after
years of paying over the odds on the black market.
For Airbus, Boeing and other manufacturers, that could mean up to
$20 billion in deals, shaped in part by the negotiating positions of
various camps during the lengthy nuclear talks. And for Iran Air's
38-year-old Boeing 747SP, the last of its kind, it should mean
well-deserved retirement.
"There are a lot of aircraft that are really at the end of their
lives," said Maximo Gainza, senior consultant at UK-based fleet
watcher Ascend Flightglobal.
"Iran is going to be a very hot market as and when sanctions are
lifted."
The chairman of Iran Air, Farhad Parvaresh, told Reuters last year
that, as soon as sanctions were eased, Iran would seek to obtain at
least 100 wide-body and short-haul jets, but that it would turn to
Russia and China if nuclear talks collapsed.
 Iranian and Western industry officials estimate that Iran, a country
of 80 million people, will need a total of 400 aircraft in the next
decade, suggesting there will be business for both major Western
suppliers due to the long waiting times.
Officials cite a broad potential shopping list, from the latest
Boeing 787 and Airbus A350 lightweight jets to workhorses such as
the Boeing 737 and 777 or the Airbus A320 and A330 and even the most
recent version of the jumbo, the Boeing 747-8, still in production
but with declining sales.
BOEING BEST PLACED
Boeing appears best placed to take advantage of the first wave of
sales, partly because France, which is home to Airbus and owns 11
percent of the firm, took a particularly hard line with Iran in the
nuclear talks, according to industry sources, diplomats and people
familiar with Iranian thinking.
Paris has become more hawkish toward Tehran in recent years as
France aligns itself with Shi'ite Iran's Sunni rivals across the
Gulf, Qatar and Saudi Arabia.
"The position of the French, particularly (foreign minister Laurent)
Fabius, has not made things easy for Airbus," said a European
aviation industry source, asking not to be identified.
Iran's transport minister last month warned France it risked missing
out on $80 billion worth of business unless it changed its stance
towards Tehran.
A French Senate panel recently expressed concerns that local firms
were falling behind in the race to Tehran.
"Being the first one in doesn't mean you'll be the first served,"
responded a senior French government official. "We'll be ready.
Don't worry about our firms," he told Reuters.
Iran Air's Parvaresh also told Reuters last year that Iran would
give preference to suppliers who had cooperated during a window for
sanctions relief that opened up in 2014.
Boeing said in October it had sold aircraft manuals, drawings,
charts and data to Iran Air in its first acknowledged dealings since
the 1979 hostage crisis that wrecked U.S.-Iranian relations and
triggered a U.S. boycott.
 The European Union does not specifically prohibit civil aviation
trade with Iran but banned the export of 'dual use' technology in
2007 and has progressively tightened restrictions since then,
effectively ruling out sales of civil aircraft and jet engines.
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Airbus said it had applied for export licences under the scheme for
temporary sanctions relief that allowed the sale of some aircraft
parts, but declined to say whether any goods or services had
actually been provided. EARLY CONTACTS
Iranian officials say numerous exchanges have been held with people
representing Western aerospace firms to explore future deals,
including meetings in several European cities.
Two senior Iranian officials said it was already understood that
Iran would buy 100 planes from Boeing once sanctions are lifted, but
U.S. industry officials deny any informal deals or commercial
discussions.
"It's certainly an opportunity. We sold a lot of planes there
before, and that fleet is really old. But until our government says
it’s OK, we’re staying on the sidelines," Boeing Commercial
Airplanes CEO Ray Conner told Reuters in Washington this week.
Some industry analysts urge caution in projecting the number of
planes Iran's airline industry will eventually order, noting that,
to sustain a large fleet, it also needs to develop profitable
passenger business - by opening up the domestic market and building
up an attractive international hub.
"They have to deregulate the economy before you see the kind of
numbers you would associate with a country of its potential," said
Richard Aboulafia of Virginia-based Teal Group.
There are plans to loosen regulated domestic fares, but traffic on
some foreign routes may already have been lost permanently to
regional rivals such as Emirates, he said.
In the long term, Iran has strategic ambitions to rival Gulf cities
as a hub attracting traffic from Western Europe and North America to
the Asia-Pacific region. But getting a new fleet of aircraft flying
quickly may need more than a lifting of sanctions.
After a boom in airplane demand, the major Western manufacturers are
sold out for most of the rest of the decade.
Experts say Iran may have to resort to the second-hand market or
lease planes to get started. But leasing firms will want to clarify
thorny issues such as jurisdiction that have gathered dust during
its enforced absence from the market.
 "There is not much choice because of the way production lines are
sold out," said Tony Whitty, CEO of UK-based aircraft trading
company Cabot Aviation. "In the short term, if you go to Airbus and
Boeing, you have got to wait three or four years."
In the interim, that could mean leasing, or buying second-hand,
outmoded four-engined models such as less recent versions of the
Boeing 747, or the out-of-production Airbus A340. Though less
popular than newer twin-jets, experts say such planes are easily
available at bargain prices and would still offer fuel savings for
Iranian carriers.
(Additional reporting by Andrea Shalal, Victoria Bryan; Editing by
Kevin Liffey)
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