A race against Trump...

The aviation industry is accustomed to working to fine margins. The delivery of a batch of turboprop airliners to Iran Air just hours before the US re-imposed economic sanctions was one of the latest examples of that practice.
Around 8pm on August 4, a stream of five ATR 72-600s roared down the runway at one-minute intervals from the European manufacturer’s final assembly plant at Toulouse-Blagnac airport.
Climbing away, they settled on a southeast course that would take them through the night on a nonstop route to Urmia, northwest Iran, where they refuelled before reaching their final destination, Tehran’s secondary airport, Mehrabad, on the morning of August 5, the day before the deadline for delivering new aircraft to the country.
The sanctions, which had been originally introduced to dissuade Iran from continuing with its nuclear research programme – a programme the west believes was aimed at creating nuclear weapons – were repealed in 2015 following an agreement under which Iran agreed to suspend its nuclear activities.
However, that agreement, reached under the administration of US president Barack Obama, was repudiated by the Trump administration. The latter announced in May 2018 that it would re-impose the sanctions after a 90-day period designed to give western companies an opportunity to wind down their activities in Iran.
During the two-year window when sanctions were lifted, Iran Air had plunged into the airliner marketplace. It ordered 100 aircraft from Airbus (46 A320 family, 38 A330 family and 16 A350) and 80 from Boeing (50 737 MAX8s, 15 777-300ERs and 15 777-9s).
Airbus had delivered just three aircraft by August, Boeing none. (Notably, however, the US company never formally included the Iranian aircraft in its order book, perhaps in a sign of caution over how the international political scene would play out. It also had an order for 30 737 MAX models from Iran Aseman Airlines.)
Iran Air also ordered 20 ATR 72-600s from the Franco-Italian turboprop manufacturer, together with a further 20 options.
By the start of 2018, ATR had delivered eight of the first 20 and planned to hand over the remaining 12 by the end of this year; by late spring, most of the remainder were at varying stages of completion at Toulouse.
The Trump ultimatum was a blow to all three airliner manufacturers, but arguably more so to ATR, for which the Iranian order made up a larger proportion of its future workload.
So, the European company was understandably keen to deliver as many of the outstanding aircraft as possible to Iran before the shutters came down once again.
Hence the stream of aircraft taking off from Toulouse-Blagnac on August 4.
I understand that a further three aircraft could have been delivered if the deadline had been extended by just 24 hours. ATR said it would apply to the US authorities for special permission to deliver them. However, it now accepts that permission will not be forthcoming.
This leaves ATR with the task of shuffling its delivery schedules and finding new owners for the seven Iranian aircraft: “We are working on trying to replace the aircraft (slots) that cannot go to Iran Air,” an ATR spokesman said. This process was progressing well and the company’s delivery target for 2018 remained unaltered.
He added that some of the aircraft had been completed and parked, but declined to say whether they would require to be repainted or have their cabins altered before re-sale to another customer.
According to Reuters, finding alternative homes for the undelivered aircraft may be complicated by the fact that they contain some features that are not standard in aircraft designed for short hops, since Iran’s mountainous geography requires extra emergency oxygen supplies.
Iran Air, which was unable to contribute to this article, has used the ATRs it has received to improve services on its domestic routes. Developing its regional services was very important to the carrier, ATR’s then-CEO, Christian Scherer, said at the manufacturer’s annual media briefing earlier this year.
He said Iran Air was using the aircraft to drive the country’s economic expansion. They were being used to revitalise regional routes and bring residents from remote regions into the capital to expose them to Tehran’s expanding economy.
“There isn’t any more powerful tool for economic emancipation than communications,” Scherer said. “This regional development is very powerful for them and it’s, frankly, very benign from a geopolitical and security aspect.”
He hoped – unsuccessfully, as it turned out – that this unthreatening use of the aircraft would encourage the US to allow ATR to continue to trade with the Iranians.
The biggest problem Iran Air faced with the new aircraft, said Scherer, was training up sufficient pilots to operate them. ATR had, therefore, sent some experienced ATR pilots to Iran to act as instructors, “to help them fly the line and to do some on-the-job training”.
Scherer added that the Iranians had been able to get much more productivity out of the ATRs than the aircraft they replaced – thought to have included ageing Airbus A300s, whose maintenance was becoming increasingly onerous. “When they started taking delivery, they realised they could fly these aircraft much more [than their elderly predecessors] because they were new and reliable and actually worked!”
According to an August report in the Iranian English-language economic daily publication, the Financial Tribune, Iran Air has opened up more than 25 new routes across the country with the turboprops.
Analysts agree that the Iranian ATRs are being used for point-to-point services, as well as creating a feeder network into Tehran.
There is irritation in Europe at the US sanctions, with some French politicians, in particular, angry at what they regard as the US imposing its rules on other nations.
There has been talk of enacting legislation that would give protection to European Union nations that continue to trade with Iran. The US has said that any company or organisation that continues to do so will be subjected to secondary sanctions. In September, for example, it blacklisted a Thai company that was acting as general sales agent for Iranian carrier Mahan Air.
Companies such as Airbus and ATR would be vulnerable to US wrath at sanctions-busting, as they use substantial quantities of US components – in ATR’s case, notably the engines for its aircraft are PW127Ms. Although made in Canada, the parent company is US powerplant giant Pratt & Whitney.
The engines are likely to be a problem for Iran in the future, commented London-based Saj Ahmad, chief analyst at StrategicAero Research, who speculated on how they would be serviced when they became due for major ‘C’- and ‘D’-checks.
While the expertise of Iran Air’s engineers and technicians was not in question, he said, getting hold of spares was likely to be difficult.
Iran Air is reported to have built up around $5 million-worth of spare parts, but the quantity of spares that could be bought for that amount of money amounted to a drop in the ocean. “I suspect it was a case of grabbing what they could and then hoping for the best,” he said.
Whether sanctions would also apply to ATR giving servicing advice to Iran Air was unknown, he added.
So, how will Iran Air keep its new aircraft operational once they reach the point in their service lives where deeper maintenance is required?
Potentially, Iran may have to resort once again to the clandestine networks of suppliers and front companies that it built up during the earlier period of US sanctions, which proved adept at side-stepping the bans on acquiring the necessary components to keep both military and civil aircraft flying.
For the moment, however, Iran’s domestic travelling public is enjoying the novelty of flying in modern, reliable aircraft.