Boeing has reached a tentative agreement to sell passenger planes to Iran’s state-run carrier, the aircraft maker said Tuesday, in the first potential major U.S. deal with Tehran since a nuclear accord last year eased sanctions.
The pact with Iran Air is in the early stages and could face hurdles, including further review by U.S. trade regulators and possible blowback from some U.S. lawmakers.
But it serves as a potential groundbreaking test for other U.S. companies seeking to enter the large Iranian consumer market. It also signals an apparent win for moderate forces in Iran led by President Hassan Rouhani, who strongly backed the nuclear deal as a way to revitalize the country’s sanctions-choked economy.
Iran’s transportation minister, Abbas Akhoundi, was quoted by state media as placing the deal with Boeing at up to $25 billion — similar in scope to an earlier order for more than 100 aircraft from Airbus, Boeing’s European rival. But any possible arrangement could include some leased Boeing aircraft or older existing models, lowering the ultimate price tag.
Iran still flies dozens of Boeing aircraft built before the 1979 Islamic revolution and seeks to upgrade its Iran Air fleet with new-model Boeing 737s and versions of the Boeing 777.
Talks between Iran and Boeing have progressed for months and face challenges on both ends. Iranian leaders had to overcome objections from hard-line factions opposing any direct outreach with the United States.
Iran’s supreme leader, Ayatollah Ali Khamenei, has been openly wary of allowing greater business footholds for U.S. firms. But he permitted Rouhani’s government to negotiate the nuclear accord as a way to ease sanctions and reopen trade ties with the West.
Boeing, in turn, needs clearance from the Treasury Department and others before finalizing the sale.
Boeing said Iran Air signed a deal expressing its “intent” to purchase aircraft. The Chicago-based company gave no details on the size of the potential sale, which is still at the stage of an effective memorandum of understanding.
Akhoundi, however, said the first Boeing planes could arrive by October if the deal moves forward on schedule.
“Boeing will continue to follow the lead of the U.S. government with regards to working with Iran’s airlines, and any and all contracts with Iran’s airlines will be contingent upon U.S. government approval,” the company said in a statement.
Iran Air has signed agreements to buy 118 planes from Airbus and 20 from ATR, a French-Italian manufacturer. Iran has said it needs up to 400 long-range planes and 100 shorter-haul jets to rebuild after years of sanctions.
But in a sign of possible obstacles for Boeing, some U.S. lawmakers have complained about the company’s outreach to Iran.
Jeb Hensarling (R-Tex.), chairman of the House Financial Services Committee, has said that institutions considering financing the sales “should ask whether it is in their long-term interests to profit from doing business with the world’s foremost state sponsor of terrorism. It’s not American jobs that are on the line but, potentially, American lives.”
Boeing shares seesawed after news of the potential deal, rising sharply in early trading and then falling.
Other Western companies have moved even more quickly to recapture a stake in Iran, where a large and educated middle class offers a tempting target for revenue.
Hours after the Boeing announcement, the French carmaker group Peugeot Citroën finalized a joint venture with Iran’s state-backed automaker, Iran Khodro, to invest up to $450 million over five years in manufacturing advances and research.
Steven Mufson contributed to this report.