Boeing CEO says end of Iran deal won't hurt 737 production

  • Boeing CEO says end of Iran deal won't hurt 737 production

Boeing CEO says end of Iran deal won't hurt 737 production

"Japan and South Korea may comply with the proposed USA reimposition of Iranian sanctions on the concern of losing the US security umbrella vis-à-vis North Korea", Khoman said.

President Trump has called the deal "defective at its core", claiming that it is not enough to prevent the creation of an Iranian nuclear bomb, despite the reduction of Iran's uranium stockpile by 98% and mandatory access for independent global bodies to inspect nuclear facilities.

France's Total, Anglo-Dutch Royal Dutch Shell and Italy's Eni were more active in Iran than USA companies, which were still limited by other sanctions unrelated to Iran's nuclear program, including a trade embargo. In exchange, the country brought any ongoing nuclear weapons program to an end.

Based on the list price, the American aerospace company has deals worth $20 billion to sell airplanes to Iranian airlines.

The following year came an agreement with Iran Aseman Airlines for 30 narrow-body 737 MAX jets and purchase rights on an additional 30 jets. Now that sanctions should be reinstated thanks to Trump, Boeing will no longer be able to see these deals through.

A collapse of aircraft deals struck under the Iran deal also will hit Airbus's 2018 order book harder than Boeing's; Airbus booked its Iranian orders early to enable it to edge Boeing in the 2016 order race, and now its entire YTD tally of 86 net orders could be eliminated.

Boeing and Airbus orders worth nearly $US40 billion at list prices are collateral damage in the Trump Administration's decision to pull out of a nuclear pact with Iran. US law gives the Treasury secretary the power to administer sanctions imposed by the president.

When asked about this loss, Boeing's VP of Government Operations Communications Gordon Johndroe simply said that the firm was going to comply with the law.

"We will consult with the United States government on next steps".

The company said it will "adapt [its] activities as necessary to conform with these changes in US law".

Regarding the Brazilian deal, Boeing and Embraer were discussing a tie-up to create a new company in which the US planemaker would have an 80.01 percent stake and the Brazilian firm 19.99 percent.

The administration said it was giving most worldwide companies 90-day and 180-day "wind-down periods" to exit contracts and ventures in Iran.

Trump's decision came despite massive efforts by Washington's European allies to convince the United States president to stay in the JCPOA. "Together, we emphasize our continuing commitment to the JCPOA".

"The EU will remain committed to the continued full and effective implementation of the nuclear deal", Mogherini said from Brussels.

Iran President Hassan Rouhani mirrored the sentiment, saying he was happy to do business with the other partnering countries.

The aircraft sales were among the most sought-after contracts for Iran.

Hopefully, companies in other countries can pick up the slack.

Boeing was reported to have "offered Iranian airlines three models of new aircraft to replace the country's aging fleet".

Fears over sanctions returning kept many major foreign companies on Iran's sidelines.

Iranian crude oil shipments to Japan and South Korea have fallen by half from their post-sanction peak in March 2017, hitting just over 300,000 bpd in April, according to ship tracking data.