The Iran-Boeing Deal: Rewards and Risks

Iran’s minister of transport, Abbas Akhoundi, announced an aircraft deal this week with U.S. aviation industry giant, Boeing. The path to this deal has been paved for quite some time. Treasury issued a general license for aircraft sales to Iran last March, and the Joint Comprehensive Plan of Action (JCPOA) now permits U.S. banks to finance the transaction. Boeing is now poised to cash in. Iran wants to buy up to 500 aircraft over the next decade to rejuvenate its aging fleet, and Boeing is reportedly in line to sell 100 of them. This comes on the heels of a multi-billion dollar deal with Airbus to purchase 118 aircraft, and other deals in the works with Bombardier and Embraer.

These deals are now technically legal, and Iran certainly needs new aircraft for legitimate transportation. But it cannot be ignored that Tehran also needs these aircraft to run an illicit logistical operation that involves the ongoing airlift of weapons and militias from its airports in Tehran and Abadan. These flights are providing fresh supplies and recruits to the Syrian Armed Forces, Hezbollah, and its own Islamic Revolutionary Guard Corps – all of whom are fighting in the Syrian civil war that has claimed the lives of 400,000 since 2011.

Iran’s state-owned airline, Iran Air, will be the sole company purchasing these aircraft. Treasury sanctioned the company in 2011 for its role in Iran’s weapons’ airlift to Damascus. And while the JCPOA delisted the company in January, Iran Air planes recently flew known resupply routes to Syria – on June 9 from Abadan while using the Tehran-Damascus flight number, and on June 8 and 15 from Tehran while using the now-defunct Najaf-Tehran flight number. Should it be proven that Iran Air is carrying weapons, supplies, or forces for the Syrian regime, the company risks getting slapped with renewed sanctions.

Iran Air is also not likely to retain all of the aircraft it purchases. Indeed, it will sell or lease many of these planes to other Iranian carriers. Among those carriers is Mahan Air, which remains under U.S. sanctions for its ongoing logistical support for Iran’s military involvement in Syria. Mahan Air is the primary airline running the illicit flights to Damascus, using Abadan’s airport as the logistical hub for the supply route.

Thus, even though these aircraft deals are legal – and even encouraged – by the U.S. Treasury, they come with great risk. These deals could make aircraft manufacturers unwittingly complicit in Iran’s support for atrocities and war crimes in Syria and for Hezbollah’s terror activities. This could certainly expose them to future sanctions. More likely is the threat of lawsuits from attorneys trying to collect $50 billion of outstanding judgments for victims of Iranian terrorism. These could create public relations nightmares if not costly legal battles. Thus, for Boeing and the others, it will not be easy to weigh risk and reward.

Emanuele Ottolenghi is a Senior Fellow at the Foundation for Defense of Democracies. Follow him on Twitter @eottolenghi