The Dec. 11 announcement that Boeing Corp. has finalized a $16.6 billion agreement to sell Iran 80 civilian aircraft is welcome news for a number of reasons.
Permitted under a specific carve-out in the Joint Comprehensive Plan of Action (JCPOA), this deal will support nearly 100,000 high-paying U.S. jobs, dramatically improve airline safety for the Iranian people and bolster the JCPOA against looming challenges in both Iran and the United States.
While U.S. sanctions continue to impede many other avenues for trade with and investment in Iran, the sale of Boeing planes sets an important precedent. It will bring Iranian officials and businessmen back into contact with private sector Americans in a way not seen for nearly 40 years and lay the foundation for improved bilateral relations. The deal is also an important as a signal to other major multinationals that it is safe for them to return to business with Iran.
With uncertainty surrounding the policies of the incoming Trump administration toward Iran, Boeing was eager to finalize this agreement while President Barack Obama remains in office. Given Donald Trump’s commitment to increasing manufacturing employment in the United States and boosting U.S. exports, it would be extremely counterproductive for him and for the U.S. economy to walk away from the JCPOA or to sign new sanctions legislation threatening the nuclear agreement – and the Boeing sales.
This is especially so because Iran so far has abided by its commitments to significantly curb its nuclear program in ways that make it extremely difficult for the country to develop a nuclear weapon undetected for at least the next 15 years.
The Boeing deal is also vital to shore up the government of Iranian President Hassan Rouhani, who faces re-election next year.
In return for its agreement to cap its nuclear activities, Iran received substantial relief of international sanctions and has been able to freely export oil again to Europe and Asia. But ordinary Iranians have been slow to feel the benefits in part because of structural problems within the Iranian economy, continued low oil prices and the unwillingness of major foreign banks to finance trade and investment in Iran.
The Boeing sale – and a likely companion deal for Airbuses – will have a dramatic impact on Iranians’ well-being. Air safety has been a serious problem in Iran for years. Primarily because of U.S. sanctions, the government airline, Iran Air, has been unable to purchase modern planes and has continued to fly aircraft that are long past their expiration date. As a result and despite the ingenuity of Iranian pilots and engineers, Iran has suffered numerous crashes. Among them: the crash on Jan. 9, 2011 of a 37-year-old Boeing 727, which disintegrated while trying to make an emergency landing in bad weather near the city of Orumiyeh in northwestern Iran. The disaster killed 77 of the 105 people onboard.
Until recently, Iran’s fleet included nine 727s as well as a number of 747s, a double decker jetliner that went into service in 1979 and has not been manufactured since 1986.
Now Iran will be acquiring 50 new single-aisle 737 MAX8s as well as 30 new wide-bodied 777s. According to Boeing, the first airplanes are scheduled for delivery in 2018.
Barbara Slavin is Acting Director of the Future of Iran Initiative at the Atlantic Council’s South Asia Center.