Iran Air & Boeing Close $16+ Billion Deal

iran-air

Boeing’s $16B aircraft deal with Iran Air faces challenges

Boeing has government approval to fill Iran Air’s $16 billion aircraft order, but it may still be grounded by Congress.

And President-elect Trump, who has criticized the Iran nuclear accord that allowed the deal to take off, could eventually have a say, too.

The Chicago-headquartered Boeing said Sunday that it will sell 80 jetliners worth $16.6 billion to Iran Air. Boeing got approval to sell planes in Iran in September but had to wait for a license for the Iran Air deal from the U.S. Treasury Department’s Office of Foreign Assets Control.

This would be the largest business deal that a U.S. company had done with Iran since President Obama signed an executive order lifting sanctions against the country. That order came after Iran agreed to end its pursuit of nuclear weapons under an accord reached in July 2015 with the United Nations Security Council members — the U.S., Britain, China, France and Russia — and Germany.

NOTE: Iran Air is entirely owned by the government of Iran. Throughout this article the company “Iran Air” & the nation “Iran” represent the same entity: the Iranian government.

What Iran Air gets for $16.6 billion*:

  • 50 single-aisled 737 MAX 8s
  • 15 long-haul 777-300ERs
  • 15 wide-body 777-9s
  • First few aircraft will be due for delivery in 2018

The issues:

This inter-state business deal between the US & Iran Air (the flag carrier airline of Iran) will be the largest since sanctions against Iran were lifted under Obama’s administration. There are a lot of facets to this story, here are a couple:

1.) The stir regarding Boeing’s announcement that 100,000 jobs are being “supported” by this deal. This focus on jobs was a transparent attempt to appease Trump, our president-elect who publicly criticized the Iran nuclear deal finalized in 2015. Trump had already caused the share value of Boeing to drop after calling for Boeing’ expensive revamp of Air Force One to be cancelled:

“Boeing is building a brand new 747 Air Force One for future presidents, but costs are out of control, more than $4 billion. Cancel order!” – president-elect Trump

Boeing is hoping the job-centric Iran Air statement will keep the social media saavy president-elect from teeing off on their share value (again).

Note: “supporting 100,000 jobs” is so fantastically vague. Boeing employed roughly              156,000 people last year (from wiki). They are not increasing employment 50% for                  this Iranian gig, big as it is. This well-placed verb refers to any job in the aerospace                industry affected by this deal.

2.) The political backlash Boeing is facing for getting involved with Iran, the largest state sponsor of terrorism. Iran, which has the largest Shia-Muslim population in the world, has been supporting Shia extremist groups across the Middle East region for years (Hezbollah, Palestinian terror groups, the Assad regime, Shia death squads in Iraq). The fact that the Shia-majority nation has been actively inciting sectarian tension in Iraq for decades is particularly relevant for the US of A. Specifically, the Iranians systematically funded, supplied, and fought alongside Shia extremist groups battling American forces throughout the Iraq War. The Boeing deal is being portrayed by many lawmakers as complicity with terrorism, and they have a case. Also, the nuclear deal negotiated in 2015 could face serious opposition in Congress & the Trump-led White House. There are numerous American shot-callers who think that the Obama administration gave Iran too much leeway in the negotiation of the nuclear deal. Any threat to the deal does not bode well for the Boeing-Iran agreement.

My Verdict:

Do the deal. The only way that tension can be relieved, aside from war, is through economic cooperation. Some hard truths:

  • Uncle Sam’s hands are not clean. The CIA & MI6 bankrolled the overthrow of the democratically-elected Iraninan president, Mohammad Mosaddegh, in 1953. Mosaddegh committed the sin of trying to nationalize Iranian oil instead of letting the Anglo-Persian Oil Company (you now know them as British Petroleum, or BP) control the key natural resource (shocker: outside influence over resources was less than popular). Unsurprisingly, the British firm was none too pleased with losing their investment. The upset Brits proceeded to successfully pressure America into tag-teaming the coup d’etat which resulted in Mohammed Reza Shah being installed as the strongman head-of-state. The Shah was a puppet that furthered our anti-Communist interest, but in the end America gained little else from supporting the coup**. In fact, the Shah enjoyed a nice run with his own state-sponsored terrorism (research SAVAK, basically the Iranian Gestapo) before being ousted during the Revolution of 1979.
  • Shia extremist fighters that killed US soldiers during the Iraq War currently fight alongside Iraqi forces against ISIS that we support. The United States of America provides the Iraqi military & some paramilitary forces with funding, supplies, & advisers in the war against ISIS, and these guys are teaming up with the same people who fought against coalition troops. If this truth does not make your stomach turn then I do not want to know what shit you get into on the weekends. US-Iranian relations shine a bright light on the fact that the unimaginable complexities of war are not for the faint of heart.

The Iranians hate us, and we hate them. However, money has a funny way of bringing people together and putting conflict on the back-burner, at least for a while.

*(Schmidt) http://marketrealist.com/2016/12/boeing-bags-iran-deal-worth-17-billion/

**The British had the key economic interest of maintaining control of their oil & the related infrastructure. America had little to gain from ousting Mosaddegh, aside from potentially curbing Soviet influence in Iran. Fascinating Wikipedia rabbit hole for those willing to see how the sausage is made (the sausage, in this case, being an Islamic theocratic republic).

Source: http://www.usatoday.com/story/money/business/2016/12/11/boeing-sell-80-jetliners-worth-166-billion-iran-air-aircraft-maker-said-sunday/95298168/

 


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