Ambition to Join Airline Elite Signaled by Iran’s Mamoth Jet Orders

The scale of the former pariah state – Iran’s airline ambitions were became evident after the signing this week of an outline deal for 109 Boeing Co. jetliners five months after agreeing to buy 118 from Airbus Group SE.

A fleet that would be larger than the current lineup at Abu Dhabi-based Etihad Airways, one of three Persian Gulf carriers that transformed air travel in the years Iran was stymied by trade sanctions linked to its nuclear program and would be three-quarters the size of that at British Airways, would be created by Iran buying almost 230 planes.

The arrival of models such as Airbus’s A380 double-decker and Boeing’s 777-9 seems set to swell the business to global proportions even though it’s not certain that flag-carrier Iran Air will take all of the jets specified under the accords — with the U.S. contract in particular still facing significant hurdles.

“There’s no doubt that they want to emulate carriers like Emirates and Etihad. People poured scorn on the ability of the Gulf carriers to fill their aircraft but they’ve done so. And Iran has had a bigger air market over the years that’s been put in a straitjacket by the international sanctions,” said John Strickland, an airline analyst at JLS Consulting in London.

He said that older planes that would have been retired years ago had it not been for the block on buying new models would most likely be replaced by most of the jets on order.

With the 12 superjumbos on order matching the number due to be taken by international heavyweights British Airways and Air France and with Iran Air set to operate batches of 425-seat 777-9s, 467-seat 747-8s and 525-seat A380s,, the planned wide-body fleet is particularly eye-catching.

In addition, the carrier has ordered 45 A330 wide-bodies, including 18 examples of the re-engined Neo version for the shorter routes and it also plans to operate 16 A350-1000s, the largest variant of Airbus’s newest twin-aisle model, which can accommodate 366 passengers.

Iran Air has also ordered 45 single-aisle A320s, among them 24 Neos, together with the 737 Max, Boeing’s own re-engined narrow-body.. the airline currently fields a fleet including Airbus’s original A300 and Fokker NV 100s from the defunct Dutch planemaker. When carriers tend to take just one model to reduce fixed costs, it hasn’t said why it wants both models.

A possible fleet of 120 wide-bodies — more than currently operated by long-haul specialists such as Singapore Airlines Ltd. — smacks of wider objectives even though Iran has long said the lifting of sanctions would spur significant plane orders to serve its 80 million population plus a diaspora of 5 million overseas.

Emulating the model established by Emirates of Dubai and followed by Qatar Airways, Etihad and, further west, Turkish Airlines, the plan could include building Tehran into a hub where people change planes on intercontinental journeys.

With most of the Americas also within range and located at a crossroads between Europe, Asia, Africa and the Middle East, the Iranian capital shares similar geographical advantages to Dubai.

In addition to carriers such as Air France-KLM Group and Deutsche Lufthansa AG desperate to hang on to lucrative long-haul traffic and with such strong neighboring incumbents, the transfer market will be tough to crack.

“Iran is certainly coming from behind. But it has the advantage of a large population that will support point-to-point traffic that the Gulf carriers don’t have because of their small home catchments,” Strickland said.

(Adapted from Bloomberg)

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s