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Iran tells it sealed Boeing plane deal at half cost

Iran stated on Sunday it had negotiated to pay just about half the announced cost for 80 new Boeing airliners in an order that the planemaker had stated was worth $16.6 billion.

Boeing and its European competitor Jet have both signed substantial contracts this month to supply airliners to Iran, the first such deals considering that global sanctions were removed under an deal to suppress Tehran’s nuclear program.

Replacing Iran’s old-fashioned civil aviation fleet is among the greatest economic opportunities of the 2015 accord to remove sanctions, which was negotiated by the outbound administration of U.S. President Barack Obama. President elect Donald Trumphas criticized the pact.

Regardless of Iran’s great need for brand-new airplanes to replace those from the sanctions period, it has entered the market at a time when Boeing, Airbus and smaller planemakers have all dealt with a decline in orders, and are for that reason anticipated to offer discount rates.

Boeing stated this month it was decreasing production of its 777 long-haul jet because of a fall in demand.

“Boeing has announced that its IranAir agreement is worth $16.6 billion. However, thinking about the nature of our order and its option possibilities, the purchase contract for 80 Boeing airplane is worth about half of that amount,” stated Deputy Transportation Minister Asghar Fakhrieh-Kashan.

A company representative in Dubai was not available for discussion.

Airbus’s agreement to offer 100 jets to IranAir, signed on Thursday, would be worth $18-$20 billion at market price, but the head of IranAir has stated the value of the agreement would not go beyond $10 billion.

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