Aerospace & Defense

Boeing Agrees to $3 Billion Sale of 737s to Iranian Carrier

Boeing Co. (NYSE: BA) on Tuesday confirmed that the company has signed a memorandum of agreement with Iran Aseman Airlines calling for the purchase of 30 Boeing 737 MAX airplanes with a list price value of $3 billion. The airline also received purchase rights for an additional 30 planes.

An order from an Iran-based carrier is certainly problematic. Iran Air and Boeing struck a deal at the end of last year for 80 Boeing jets, 50 737 MAXs, 15 777-300ERs and 15 777-9s. As of the end of February, the company has not added the planes to its order book. This deal, worth $16.6 billion at list prices, and the deal announced this morning are far from being real orders.

In Tuesday’s press release Boeing said:

Boeing negotiated the MOA under authorizations from the U.S. government following a determination that Iran had met its obligations under the nuclear accord signed in 2015. Boeing will look to the Office of Foreign Assets Control for approval to perform under this transaction. Boeing continues 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 are contingent upon U.S. government approval.

The Trump administration has said little about Iran other than to reiterate campaign statements that the decision by the Obama administration and other nations to remove sanctions on Iran was the wrong choice.

For its part, Boeing emphasized the job-creating power of the deal with Iran Aseman:

According to the U.S. Department of Commerce, an aerospace sale of this magnitude creates or sustains approximately 18,000 jobs in the United States. Deliveries would be scheduled to start in 2022.

How the president will react to this latest deal with Iran is unknown, but absent an initial negative reaction, it’s reasonable to assume that Trump will simply let the Boeing deal run its course. Reasonable, perhaps, but we wouldn’t bet the ranch on it.