Airbus versus Boeing: Iran deals the difference

Standing out as the unusual kingmaker between the two Western giants is Iran, emerging from decades of sanctions to place billions of dollars of new orders.

Tim Hepher –
Over the past two decades, planemakers Airbus and Boeing have traded the crown in the annual orders race, and it was usually clear who had bragging rights in the fiercely competitive $120 billion annual jet market.
On Wednesday, Airbus retained the top spot when it said it had recorded a total of 731 net orders for 2016, beating Boeing’s tally of 668 for the year released a week ago.
Standing out as the unusual kingmaker between the two Western giants is Iran, emerging from decades of sanctions to place billions of dollars of new orders.
Because of fragile demand elsewhere, its comeback carries unusual weight.
While Airbus included all but two of the 100 aircraft it sold to Iran last year, its American arch-rival did not include the 80 aircraft it sold to the country.
It is unclear why Airbus formally reported Iranian orders while Boeing did not, and what criteria were used by each company in making their decisions.
Airbus is further ahead in the sales process; Iran took delivery of its first Airbus jet on Wednesday, while Boeing’s planes will be delivered from 2018.
A source close to Boeing said there was some bemusement at the US planemaker as to why Airbus was able to book all of their Iranian orders. Airbus sources said the company’s year-end numbers had been strictly audited.
Analysts say decisions on whether to formally report such orders in annual tallies would depend partly on the status of the US export licenses needed by both companies due to their heavy reliance on US parts.
People close to the deals say that while both big jetmakers have received US export licenses for sales to Iran, only some of them cover the whole delivery period running until 2028.
Both companies must apply for extensions for part of their orders.
Industry sources say the same contractual conditions applied to both companies.
Even though Boeing lost the headline order battle, analysts say it may ultimately benefit from lagging Airbus in the Iranian sales process if it can use its rival’s presence in the country to make the case for its own deal to go through, in the face of US Republican political opposition.
During his election campaign, President-elect Donald Trump was critical of the international nuclear deal that led to the lifting of sanctions on Iran. — Reuters