Saying that it had signed an order with Iran Air “under authorizations from the U.S. government,” Boeing Co. (NYSE: BA) confirmed that the Iranian airline intends to buy planes from the U.S. maker, but Boeing did not say how many planes are involved or how much the order may be worth.
According to the AP, Boeing issued a statement to the news organization Tuesday morning that included these words:
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.
Approval for a sale needs to come from the Treasury Department’s Office of Foreign Access Control (OFAC). The agency also needs to approve the already-announced sale of 118 Airbus planes to Iran because the planes’ parts lists contain more than 10% American-made parts.
Iran Air’s Boeing order is said to be around the same size as the airline’s order on Airbus, which is valued at around $25 billion at list prices. Boeing itself has refused to discuss the size of the potential order.
Another possible hitch is Iran’s Supreme Leader Ayatollah Ali Khamenei’s recently disclosed opposition to buying more airplanes. In a speech last week he said that it is “a very important and necessary task” for the country to rebuild its fleet, but then asked if it is a “priority.” The Supreme Leader also has questioned buying any goods made in the United States.
On one hand, the agreement between Boeing and Iran Air could be snuffed by the United States, and on the other it could be extinguished by Iran. The agreement between Airbus and Iran requires U.S. approval, and if Iran cancels the Boeing agreement there could be significant pressure for OFAC to deny the sale of the Airbus planes to the Islamic Republic.
There are also concerns about how either Boeing or Airbus would get paid for the planes because the United States has not lifted sanctions on Iran’s participation in the international banking system.
Boeing’s stock gained more than 2% on Monday to close at $132.75, in a 52-week range of $102.10 to $150.59.