ATR Looks for New Customers to Take Iran Air Planes Amid Lobbying Effort

By Robert Wall

FARNBOROUGH, England--European turboprop airliner maker ATR has begun efforts to find potential new customers for planes originally intended for delivery to Iran Air, even as it continues efforts to get U.S. government's approval to ship the airliners to the original buyer.

ATR, jointly owned by Airbus SE (AIR.FR) and Italy's Leonardo SpA (LDO.MI), in June lost its license to deliver 12 planes to Iran Air. The company had previously delivered 8 planes of 20 Iran Air had ordered.

President Donald Trump in May pulled the U.S. out of the Iranian nuclear accord. That deal, finalized in 2015 between Iran and six global powers, lifted sanctions on the Middle Eastern country in return for Tehran agreeing to curb its nuclear program.

ATR has asked the U.S. authorities, specifically the Office of Foreign Assets Control of the Treasury Department, to consider allowing the remaining planes to go. "We are having a reasonable dialogue with OFAC who understand the predicament their decision puts us in," ATR Chief Executive Christian Scherer said.

Mr. Scherer was "reasonably optimistic" the situation could be resolved, he said Wednesday.

ATR has begun looking for alternative customers who could take the plane if the U.S. continues to block their export to Iran Air, Mr. Scherer added. Some of the planes are already built.

Mr. Scherer said ATR should be able to achieve or at least get close to its 80-plane full-year delivery target despite the uncertainty over the Iran Air planes.

The Trump administration's move stopped billions of dollars of deals that Western companies had struck with Iran since 2016 when most of the sanctions were lifted. Plane purchases were among the biggest transactions agreed with Tehran. Boeing Co. (BA) and Airbus agreed to provide new jetliners to Iranian carriers, which have some of the world's oldest airliner fleets after being subjected to years of sanctions.

Boeing, the world's largest aircraft maker, stands to lose sales to Iranian airlines of 110 planes valued at roughly $20 billion before industry-standard discounts. The Iranian planes didn't yet feature in the Chicago-based plane maker's production plans, Boeing has said.

Airbus had delivered three planes for Iran Air after under a pre-discount $20 billion deal for 100 planes. It has suspended further handovers. Both Airbus and Boeing have said they would comply with U.S. sanctions rules.

Though based in Toulouse, France, ATR requires U.S. export approvals for its sales to Iran because many of the plane parts it uses come from U.S. suppliers.

Write to Robert Wall at [e-mail]

(END) Dow Jones Newswires

July 18, 2018 07:08 ET (11:08 GMT)

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