Iran orders $21bn of Russian aircraft

27 September 2015

Passenger jets and satellite equipment contract signed

  • Iran to buy $21bn of Russian satellite equipment and civil aircraft
  • Deal includes Sukhoi Superjet 100s
  • Overhauling Iran’s ageing commercial airfleet is expected to cost $20bn and involve 90 new aircraft a year

Tehran has signed contracts to purchase $21bn of Russian satellite equipment and civil aircraft, the managing director of Iran Aviation Industries Organisation (IAIO), Manouchehr Manteghi told Russia’s Sputnik news agency.

Iran will buy an undisclosed number of Sukhoi Superjet 100s, which have a listed price of about $35m each. It is a twin-engine light passenger jet with capacity for up to 98 passengers.

The contracts were reportedly signed at the MAKS-2015 air show, held near Moscow on 25-30 August.

Iran will need up to 90 new aircraft annually over the next few years to modernise its old and poorly maintained commercial airline fleets, according to Mohammad Khodakarami, the Iranian Civil Aviation Organisation’s acting president. He also said they planned to procure an equal number of aircraft from France’s Airbus and the US’ Boeing.

However, US sanctions are still preventing US and European companies from transactions with Iran. As well as disallowing the sale or leasing of new aircrafts to the Islamic Republic, the US sanctions in particular ban the supply of spare parts, services and other relevant aviation technologies.

The embargoes are not expected to be lifted until early 2016 at least, while sanctions on the IAIO may remain due to its military responsibilities.

Any orders placed with major aircraft manufacturers would also take several years to fill due to backlogs. Due to the large number of aircraft needed, Iran is expected to turn to second-hand markets and leasing to meet its requirements.

Overhauling the country’s commercial airline fleets is estimated to require long-term investments worth $20bn, or an average of at least $1.5bn annually.

Iran is also considering the purchase of military aircraft from Russia, according to local press.

Stay informed with the latest in the Middle East
Download the MEED app today, available on Apple and Android devices

A MEED Subscription...

Subscribe or upgrade your current MEED.com package to support your strategic planning with the MENA region’s best source of business information. Proceed to our online shop below to find out more about the features in each package.