Many are wondering why Iran’s national airline, Iran Air, is only expected to pay half for a $16.6 billion order for 80 Boeing airplanes.
This comes after Iran state news agency IRNA reported Iran’s deputy transport minister Asghar Fakhrieh Kashan saying it was paying the discounted rate because of “the style of our order and its options.”
Industry experts are saying this is standard procedure for bulk orders.
Teal Group aviation analyst Richard Aboulafia told The Street Tuesday Iran Air isn’t getting a deal other companies aren’t privy to receiving.
“Volume customers — that is, anyone who needs more than a dozen jets — get 50% off Airbus and Boeing list prices if they ask politely and wear a tie,” Aboulafia said.
Boeing announced the agreement December 11, which will allow the company to deliver 50 737 MAX 8s, 15 777-300ERs and 15 777-9s. Boeing was previously unable to do business with Iran because of nuclear-related sanctions placed upon the country. Iran was previously unable to purchase airplanes from Boeing and its chief rival Airbus after the takeover of the U.S. Embassy in Tehran in 1979. Airbus and Iran Air have a deal in place for 100 airplanes.
Some aviation experts, including AirSight aviation consultant Addison Schonland, have gone as far to say Iran didn’t get the best deal possible when it announced it would pay half price.
Hah! They still overpaid https://t.co/H0roOPTD2a
— Addison Schonland (@aschonland) December 25, 2016
Boeing says it expects to deliver the first of its 80 airplanes to Iran in 2018.