Boeing Co. won U.S. approval to sell its first jetliners to Iran in almost 40 years, paving the way for the biggest business transaction between the two nations since the 1979 Islamic Revolution and the U.S. hostage crisis.
The U.S. Treasury Department granted licenses to Boeing and Airbus Group SE on Wednesday for the first of a flurry of aircraft orders that Iran is counting on to upgrade an aging fleet. Airbus won approval to export the first 17 jets in a $27 billion transaction announced in January as economic sanctions were eased. Boeing is still finalizing terms to provide as many as 109 jets to Iran Air, the Chicago-based planemaker said in an e-mailed statement.
“It removes some uncertainty,” Howard Rubel, an analyst at Jefferies, said of Boeing’s license. “It says that commerce is important and commerce builds bridges. It is also a pathfinder for other people that may want to do business with Iran over time.”
“Any final sales agreement would have to adhere to the license we’ve been issued,” Mark Sklar, a spokesman for Boeing, said by e-mail.
Boeing rose on the news, advancing 2.2 percent to $130.56 at the close in New York, tied for the biggest gain on the Dow Jones Industrial Average.
The company faces risks and uncertain rewards as it vies with Airbus to replace Iran’s museum-vintage fleet. Congressional opponents have vowed to block the exports. Boeing may also need to leave wiggle room to back out of any potential orders if the next U.S. president decides to reinstate sanctions.
There’s also no assurance that all the orders will materialize, given the uncertain finances of Iranian airlines and competition from their Persian Gulf counterparts.
Opponents of the Boeing deal pointed out that the Treasury imposed sanctions on Iran Air in 2011 for using passenger and cargo planes to transport rockets and missiles to places such as Syria, sometimes disguised as medicine or spare parts. At other times, members of Iran’s Revolutionary Guards took control of flights carrying sensitive cargo. Those restrictions were lifted after an international nuclear agreement was signed in July 2015.