Nov. 21, 2016, © Leeham Co.: The vote last week by the US House of Representatives to block Airbus and Boeing from selling airplanes to Iran Air doesn’t do this, even if the US Senate goes along and if President Obama changed his mind to veto the legislation and signed the bill instead.
The House bill only prevents US-sourced financing.
This means Airbus and Boeing could (1) sell the planes to Iran for cash or (2) Iran could use non-US financing to pay for them.
It’s been reported that Dubai Aerospace Enterprises is already lined up to lease the first 18 Airbuses to Iran Air. No US money here.
Airbus and Boeing will only say they are working with regulators and will comply with any outcome.
President Obama said he will veto legislation trying to block the Boeing sale should it reach his desk.
But what happens after Jan. 20, when Donald Trump takes office?
Trump said he will tear up the Iran deal, which he can only do in part. The US is one of six countries that are parties to the deal. The other five don’t plan to vitiate the deal.
The president-elect already has named people to his team who are adamantly opposed to any reconciliation with Iran.
The new Congress, which seated right after the first of the year, can adopt even tougher language in a blocking bill. President Trump will almost certainly sign that.
Only then will Airbus and Boeing be prevented from selling aircraft to Iran.
For Boeing, the immediate impact means it’s unlikely the Iran Air order for 80 aircraft, including four 747-8s, 15 777-300ERs and 15 777Xs, will be booked this year. This makes it harder for Boeing to meet a 1:1 book:bill of around 745 this year.
Likewise, Airbus probably won’t book its Iran Air order for 116 aircraft, either.
With Trump’s election, it’s looking less and less likely that either Airbus or Boeing will complete their sales to Iran.
But for the moment, the bill by the House of Representatives doesn’t block either sale. It only prevents US money from financing them.