Iran Aviation: sanctions bite as BA, Air France and KLM withdraw

The return of US sanctions against Iran in Aug-2018 is having a significant impact on the Iran-Western Europe aviation market.

British Airways will suspend its London Heathrow-Tehran service from 23-Sep-2018, leaving Iran Air as the sole operator on the route. BA has said that the route is no longer commercially viable, due to a fall in the number of business travellers.

KLM is to cease operating Amsterdam-Tehran from 24-Sep-2018, blaming the route's negative results and financial outlook. Iran Air will also be the only airline on this route. From the same date, Air France's Joon-branded service from Paris CDG to Tehran will also be suspended, leaving the route to Mahan Air and Iran Air.

Austrian Airlines will suspend its triangular Vienna-Shiraz-Isfahan-Vienna service in late Sep-2018, although it will maintain its Tehran operation. In addition, Aegean Airlines will discontinue its service to Tehran from Athens (included in Eastern/Central Europe) from 11-Oct-2018, leaving no other operator.

Moreover, Iran Air and Mahan Air are reducing capacity to Western Europe and Qeshm Air is exiting this market entirely.

After strong growth in 2016 and 2017 (following the removal of sanctions), Iran-Western Europe seat capacity is set to fall by 30% this winter.