Boeing & Airbus will suffer from the Iran decision

The US Administrations decision to withdraw from the Iran nuclear deal isn’t just about restraints placed on Iran for trying to develop a nuclear weapon.

The sanctions that will be imposed will – are already – driving up fuel prices even though there is more than enough supply at present. That will knock airline profits and ticket prices will rise, as the 2 million barrels a day Iran exports drops out of the system.

Because much of the world relies on US banking pathways and many items are transacted in dollars – far fewer than of old, but enough to be concerned, restrictions on financial transactions will be enforced.

These transactions and the restrictions on technology transfer that usually accompany them will in effect, cripple the ability of Boeing and Airbus to deliver more aircraft to Iran. $39 billion worth are still to be delivered and that’s now very unlikely.

With Iran desperate to avoid economic damage, it will inevitably fall ever closer to Russia and China, whose new airliner programmes are looking for customers. Could the great irony of this decision be that Iran ends up both with a nuclear weapon and new aircraft from China and Russia that boosts their aviation sectors in competition with Boeing and Airbus?

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