Iran sanctions to cost Boeing, Airbus $39bn

Iran sanctions to cost Boeing, Airbus $39bn

The American company is set to lose $20 billion in contracts thanks to Trump. In exchange, the country brought any ongoing nuclear weapons program to an end.

Airbus was first to sign a preliminary agreement with Iran Air in January 2016 for up to 118 aircraft, including 21 A320ceos, 24 A320neos, 27 A330ceos, 18 A330-900s and 12 A380s. Boeing originally made a deal with Iran Air to deliver 80 aircraft valued at $17 billion, and made another agreement with Aseman Airlines for 30 planes for around $3 billion. Now that sanctions should be reinstated thanks to Trump, Boeing will no longer be able to see these deals through.

U.S. Treasury Secretary Steve Mnuchin said on Tuesday the measures would include cancelling export licenses issued to Boeing and rival Airbus SE to sell about $40 billion worth of jetliners to Iranian carriers.

Averring that the agreement is "one of the biggest achievements diplomacy has ever delivered", one that demonstrates that "win-win solutions are possible", she asked Iran's "citizens and leaders" not to let anyone dismantle it. In April of previous year, it received another order from Iran's Aseman Airlines for 30 Boeing 737 MAX planes, with an additional option for 30 more planes.

When asked about this loss, Boeing's VP of Government Operations Communications Gordon Johndroe simply said that the firm was going to comply with the law. Even before his statement, the press Secretary of the Boeing company Gordon jandro announced that the Corporation will be guided by the decisions of the USA administration.

"We will consult with the USA government on next steps". "This might take some time, " a spokesman for the company said by email.

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Trump's decision came despite massive efforts by Washington's European allies to convince the USA president to stay in the JCPOA. "I can tell you with confidence that we have continued to build risk mitigation into our 777 production plan". "We urge all sides to remain committed to its full implementation and to act in a spirit of responsibility".

The U.S. says the sanctions will also sharply curtail sales of oil by Iran, which is now the world's fifth-largest oil producer.

"We have no Iranian deliveries that are scheduled or a part of the skyline this year, so those have been deferred in line with the USA government processes", Boeing CEO Dennis Muilenburg told investors April 25. In the case of oil sales, there will be a 180-day period for countries to wrap-up existing contracts and achieve "significant reductions" in their purchases of crude from Iran.

The other signatories' criticism of Trump's announcement was unanimous, worded more or less strongly, depending on the country.

But Boeing didn't have any Iranian deliveries scheduled this year as uncertainty on the license loomed.

The price of oil rose sharply on Wednesday to its highest since 2014 on expectations that the new sanctions will crimp Iranian energy exports. "There are more concerns of something escalating over there in the next several months as the sanctions start to get implemented". And what Trump is doing is just that; making common Iranians bitter at America.

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