0512 GMT November 17, 2017
ATR spokesman David Vargas also told the Associated Press the deal is for the 20 ATR 72-600s, a twin-propeller aircraft, and said Iran Air had an option to purchase another 20.
The lifting of economic sanctions in 2015 came after Iran agreed to limit its enrichment of uranium. That opened a promising market for products made by Pratt, Boeing, and others in the West, an aerospace industry analyst said Thursday.
The ATR 72-600 planes are made by Avions de Transport Regional, a France-based partnership of Airbus Industries and Italy's Leonardo S.p.A. Two PW127M engines, built by Pratt & Whitney Canada, power each planes.
Vargas declined to offer a value for the deal with Iran Air. The confirmed portion of the deal is worth $536 million at list prices, though buyers typically negotiate discounts on bulk orders. Iranian state TV described the deal as being worth about $400 million.
Engines typically make up a quarter of the cost of an aircraft.
But it's the potential for more sales — and much larger orders — that makes the deal significant, Ray Jaworowski, a senior aerospace analyst with Newtown-based Forecast International, said.
"The potential of Iran as a civil aviation market is considerable," Jaworowski said.
Since the economic sanctions were imposed, Iran Air has been prevented from modernizing its fleet, which has left it with a mix of older Airbus, Boeing and planes from other companies' planes which have an average age of more than 20 years, Jaworowski said.
"Iran has the second-largest economy in the Middle East, with a large and growing middle class, so prospects are bright for substantial air traffic growth on both domestic and international routes," he said.
Still, Jaworowski said, there are risks that the Iranian market could dry up again. The political situation is still fragile, he said, and the "potential for some disruption in relations down the road is real."
Boeing Co. has already made a $16.6 billion sale already to Iran Air, while its European rival Airbus signed one estimated to be worth some $25 billion. The Treasury has signed off on both those deals.
Chicago-based Boeing also signed a $3 billion deal this month to sell 30 737 MAX aircraft to Iran's Aseman Airlines, a firm owned by Iran's civil service pension foundation. The Boeing sales represent the first major deals for an American company in Iran since the 1979 Islamic Revolution.
The financing side of the equation — whether from banks, leasing companies, other financial institutions, or even the aircraft manufacturers themselves — also is something of an unknown at this point, Jaworowski said.