Leahy Urges Quick Resolution of Iran Banking Issues

Leahy Urges Quick Resolution of Iran Banking Issues ...
aviationweek.com 02/06/2016 Auto

Keywords:#ATR, #Iran, #Iran_Air, #Iranian

Jens Flottau | Aviation Daily
DUBLIN—Airbus sales chief John Leahy has warned that delays in setting up a secure system of money transfers in and out of Iran could jeopardize orders from the country.
“We have to have a reliable international banking system,” he told Aviation Daily at the IATA annual general meeting here. The issues “need to be sorted out in the next few months, otherwise there will be no deals,” he said.
Some international sanctions against Iran were lifted earlier this year. But banks have been extremely cautious in reinstating business links with Iran, because of the risk of noncompliance with residual sanctions. “The banks are very shy, but we have to work this out,” Leahy said.
Airbus in January became the first Western aircraft manufacturer to sign a preliminary agreement with Iran Air, covering a total of 21 A320ceos; 24 A320neos; 27 A330ceos; 18 A330-900s; and 12 A380s. Since then, there has been little movement. The manufacturer has revised downward its estimate about how many aircraft it can deliver to Iran in 2016 because of the delays. Leahy said the situation is “becoming more and more difficult.” Airbus would have “a few aircraft available on the ramp” that it could allocate to Iran Air once the situation has been sorted out, he added.
The lack of an approved banking process for predelivery payments, typical of firm contracts and memoranda of understanding, has meant that so far, no money has been transferred.
Leahy pointed out that such problems are not limited to Airbus; all manufacturers are affected. ATR in February signed an agreement with Iran Air for 20 ATR 72-600s, plus 20 options. Other airframers have held talks with Iranian airline officials, but have not signed deals.
On top of the logistics and legal questions that the international community still has to sort out, Iranian airlines are likely to find it very hard to find lessor, banking or institutional-investor financing for their aircraft acquisition, because of the high level of risk involved. Banking officials have made clear that, although they are keen to do business with Iran eventually, several layers of uncertainty—including market trends in Iran—are making them take a wait-and-see approach, even if they have no more concerns about fines.
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