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US grants Airbus, Boeing permission to sell aircraft to Iran

ASSOCIATED PRESS
DUBAI
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Aviation giants Airbus and Boeing Co. have received permission from the U.S. government to sell aircraft to Iran, part of landmark deals potentially worth some $50 billion in total following last year's nuclear accord. The announcements Wednesday came as Iranian and U.S. leaders are in New York for the United Nations General Assembly and show that the outgoing administration of President Barack Obama is honoring the economic terms of the nuclear pact. The next administration, however, may change that equation for Airbus and Boeing, whose possible deal with Iran would be the biggest for an American company since the 1979 Islamic Revolution and U.S. Embassy takeover. European airplane manufacturer Airbus announced the license from the U.S. Treasury's Office of Foreign Assets Control early Wednesday. Boeing followed with its own announcement later in the day. Though based abroad, Airbus needed the approval of the U.S. Treasury for the deal because at least 10 percent of the manufacturer's components are of American origin.

Airbus applied for two licenses to cover its deal with Iran to ensure the fast delivery of some of the aircraft, Airbus spokesman Justin Dubon told The Associated Press. The license announced Wednesday covers the first 17 planes involved in the deal, which will be A320s and A330s, he said. Dubon said Airbus hoped to receive a second license allowing it to sell the remaining planes to Iran soon.

In January, national carrier Iran Air signed agreements to buy 118 planes from Airbus, estimated to be worth some 22.8 billion euros ($25 billion). On Sunday, state TV reported that Asghar Fakhrieh Kashan, a deputy transportation minister, said Iran would cut the number of Airbus planes to 112. Base model A320s are listed at an average of $98 million, while A330s start at $231.5 million. That puts the value of the approved 17 aircraft in the first license around at least $1.8 billion and possibly much higher based on list prices, though buyers typically negotiate sizable discounts for bulk orders.Under Boeing's deal, Iran Air will buy 80 aircraft with a total list price of $17.6 billion, with deliveries beginning in 2017 and running until 2025. Iran Air also will lease 29 new Boeing 737s in a deal that Iranian officials have suggested would be worth some $25 billion in total.

Iran's nuclear deal with world powers, which limits its enrichment of uranium in exchange for the lifting of some international sanctions, specifically allowed for the purchase of aircraft and parts. The license approval clears the way for the two plane manufacturers to begin accessing one of the last untapped aviation markets in the world, home to 80 million people. However, Western analysts are skeptical that there is demand for so many jets or available financing for two separate $25 billion deals.

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