Iran sanctions to cost Boeing, Airbus $39bn

Boeing to consult U.S. after Trump move puts Iran jet deal in jeopardy

Boeing to consult U.S. after Trump move puts Iran jet deal in jeopardy

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

President Donald Trump's decision to leave the Iran deal will have negative long-term consequences.

The Trump administration Tuesday gave companies 90 to 180 days to wind down existing contracts. The deal came as sanctions were lifted on Iran and its airlines moved to modernize their aging fleet.

Iran denies it has tried to build atomic weapons and says its nuclear program is for peaceful purposes.

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

Aircraft deals worth $38-billion (R478- billion) could collapse following the United States' s withdrawal from the Iran nuclear accord.

The French firm now has a contract with Iran Air for 100 planes worth about $19 billion according to Gizmodo and, unlike Boeing, the firm has included its deals with Iran in its order book.

The lack of a share price reaction is entirely due to the huge backlog of single-aisle planes - Boeing 737s and Airbus A320s - that will keep the companies' assembly lines busy for at least four or five more years regardless of the loss of a few orders.

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Although Airbus and Boeing are arch-foes in the $120 billion annual jet market, their deals with Iran had brought them into alignment because each depended on the same USA licences.

"As we have throughout this process, we'll continue to follow the USA government's lead", Boeing spokesman Gordon Johndroe said before Mnuchin's comments. "As we have throughout this process, we'll continue to follow the USA government's lead", Gordon Johndroe, a Boeing vice president, said in a statement. Total of France, which has a big USA presence, signed a $5bn dollar deal with Iran and will be hoping that French government intentions to challenge the U.S. move at the World Trade Organization may salvage some of that. "France, Germany, and the United Kingdom regret the USA decision to leave the JCPOA [Iran deal]", echoing former U.S. president Barack Obama by claiming that "the nuclear non-proliferation regime is at stake". "The E.U. stresses its commitment to ensuring that this can continue to be delivered". "This agreement remains important for our shared security".

But given Trump's hawkish views on Iran before he took office, Boeing always saw the deals as tenuous. "We urge all sides to remain committed to its full implementation and to act in a spirit of responsibility".

"They hadn't been doing business with Iran for a long time", Windau said.

For now, Aboulafia said, Iran will likely be forced to fall back again on efforts to acquire newish aircraft through expensive third-party transfers from holding companies in semi-neutral countries.

In April 26 remarks to Congress, Mattis said: "We need to focus on what is in the best interest of Middle East stability and the threat that Iran poses".

Unfortunately, many European companies that were willing to do business with Iran also have facilities in the USA, making it impossible for them to ignore America's laws.

The other signatories' criticism of Trump's announcement was unanimous, worded more or less strongly, depending on the country. Secondary sanctions restrict USA companies doing business with non-US companies who do business with Iran. And just a couple of years before the deal was reached, the country was in such a bad shape because of the sanctions that many Iranian middle-class families couldn't even afford to buy meat.

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