Saying that it had signed an order with Iran Air “under authorizations from the U.S. government,” Boeing Co. (NYSE: BA) confirmed that the Iranian airline intends to buy planes from the U.S. maker, but Boeing did not say how many planes are involved or how much the order may be worth.
According to the AP, Boeing issued a statement to the news organization Tuesday morning that included these words:
Boeing will continue to follow the lead of the U.S. government with regards to working with Iran’s airlines, and any and all contracts with Iran’s airlines will be contingent upon U.S. government approval.
Approval for a sale needs to come from the Treasury Department’s Office of Foreign Access Control (OFAC). The agency also needs to approve the already-announced sale of 118 Airbus planes to Iran because the planes’ parts lists contain more than 10% American-made parts.
Iran Air’s Boeing order is said to be around the same size as the airline’s order on Airbus, which is valued at around $25 billion at list prices. Boeing itself has refused to discuss the size of the potential order.
Another possible hitch is Iran’s Supreme Leader Ayatollah Ali Khamenei’s recently disclosed opposition to buying more airplanes. In a speech last week he said that it is “a very important and necessary task” for the country to rebuild its fleet, but then asked if it is a “priority.” The Supreme Leader also has questioned buying any goods made in the United States.
On one hand, the agreement between Boeing and Iran Air could be snuffed by the United States, and on the other it could be extinguished by Iran. The agreement between Airbus and Iran requires U.S. approval, and if Iran cancels the Boeing agreement there could be significant pressure for OFAC to deny the sale of the Airbus planes to the Islamic Republic.
There are also concerns about how either Boeing or Airbus would get paid for the planes because the United States has not lifted sanctions on Iran’s participation in the international banking system.
Boeing’s stock gained more than 2% on Monday to close at $132.75, in a 52-week range of $102.10 to $150.59.
Take Charge of Your Retirement In Just A Few Minutes (Sponsor)
Retirement planning doesn’t have to feel overwhelming. The key is finding expert guidance—and SmartAsset’s made it easier than ever for you to connect with a vetted financial advisor.
Here’s how it works:
- Answer a Few Simple Questions. Tell us a bit about your goals and preferences—it only takes a few minutes!
- Get Matched with Vetted Advisors Our smart tool matches you with up to three pre-screened, vetted advisors who serve your area and are held to a fiduciary standard to act in your best interests. Click here to begin
- Choose Your Fit Review their profiles, schedule an introductory call (or meet in person), and select the advisor who feel is right for you.
Why wait? Start building the retirement you’ve always dreamed of. Click here to get started today!
Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.
Our expert who first called NVIDIA in 2009 is predicting 2025 will see a historic AI breakthrough.
You can follow him investing $500,000 of his own money on our top AI stocks for free.