BA Boeing Co

By Robert Wall 

LONDON -- Iran's controversial effort to upgrade its airliner fleet has taken another step with a deal valued at up to $1 billion to buy planes from a joint venture of Airbus SE and Leonardo SpA.

Aircraft maker ATR, which is based in Toulouse, France, said Iran Air had signed a firm order for 20 ATR 72-600 regional planes with options for 20 more. Deliveries could begin "within weeks" and be completed next year, said the turboprop-making joint venture between Toulouse-based Airbus and Leonardo, Italy's biggest aerospace and defense company.

European and Asian firms have flocked into Iran after the removal of economic sanctions on the country. American companies have largely held back, unsure about whether President Donald Trump, a sharp critic of the nuclear deal with the country when he was on the campaign trail, would try to alter the pact or otherwise discourage closer business ties.

Aircraft contracts, including those involving Boeing Co., the world's No. 1 plane maker, are among the highest-profile deals between Western companies and Iran after foreign powers lifted many sanctions on Tehran last year in exchange for restrictions on its nuclear program.

Iran is an attractive market for plane makers because of its size and large fleet of aged planes after several decades of sanctions made it difficult for Iranian carriers to buy new jets and aircraft parts.

Boeing this month agreed to sell up to 60 single-aisle planes to a second Iranian airline, Iran Aseman Airlines, after last year finalizing a $16.6 billion deal with flag carrier Iran Air for 80 planes. The Chicago-based plane maker still is awaiting final approval from the U.S. Treasury for those sales.

ATR said it had all the necessary licenses to start shipping its 70-seat turboprop planes, which typically are used on shorter routes. Parent Airbus, the world's No. 2 plane maker, began delivering planes to Iran Air in January after last year finalizing the sale of 100 jetliners.

Some U.S. lawmakers remain opposed to the transactions, accusing Iran of using commercial jetliners to ship money and weapons to support terrorist activities. Iran has denied it supports terrorist groups.

U.S. Senator Marco Rubio (R., Fla.) and Rep. Peter Roskam (R., Ill.) on April 10 sent a letter to President Trump asking the administration to block U.S. companies from selling planes to Iran. "We urge you to suspend current and future licenses for aircraft sales to commercial Iranian airlines until your administration conducts a comprehensive review of their role in supporting Iran's illicit activity," the lawmakers wrote.

Write to Robert Wall at robert.wall@wsj.com

(END) Dow Jones Newswires

April 14, 2017 02:47 ET (06:47 GMT)

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