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CAPA Iran Aviation Summit 2016: Iran announces Airbus and ATR order plans

CAPA’s Iran Aviation Summit 2016, the first international aviation conference in Iran for nearly four decades, opened on 24-Jan-2016.

More than 400 delegates and attendees – airlines, airports, aircraft and engine manufacturers, lessors, GDS and technology providers and suppliers – listened to aviation leaders and decision makers talking about the future of Iran’s aviation market.

Some of the highlights from Day 1 were the announcement by Iran's Deputy Minister of new aircraft orders from Airbus and ATR, Iran Air's 10 year development plan, including making Tehran Airport a major transit hub, and Turkish Airlines' prediction of a doubling of tourism demand within two years.

Iranian Minster of Roads & Urban Development Dr Abbas Akhoundi announced that Iran will invest USD250 million to modernise its air traffic management infrastructure. Iran has opened five new airspace corridors in the last few months, and according to Dr Akhhoundi more new corridors will be opened in the future, with the aim of creating the most secure and safe airspace in the region.

The minister also announced that a contract to expand Tehran Imam Khomeni International Airport is imminent, and will ensure that the airport is developed to handle 45 million passengers p/a. According to Dr Akhhoundi, only 10 of the more than 65 operational airports in Iran currently have sufficient infrastructure, creating tremendous opportunity for foreign investment and partnerships.

Iranian Deputy Minister of Roads & Urban Development Ashgar Fakhreih Kashan announced that Iran has reached “almost the final stage” of negotiations with Airbus for 127 aircraft – not 114 as previously and widely reported. The order will go to Iran Air, and will include A320, A330, A340, A350 and A380 aircraft. Deliveries will be between 2016 and 2022, with the majority to be delivered before 2020.

Deputy Minister Kashan also revealed that Iran has entered negotiations with ATR for 40 aircraft. Deliveries of the aircraft will be scheduled for 2016 and 2017.

Iran has also entered some “unofficial” discussions with Boeing, but no indication of the scale or type of order were announced. It was revealed that communications are ongoing.

Iranian Civil Commission of Parliament, chairman Dr Mamedi Hashemi stated that the task before Iran’s aviation stakeholders at the moment is to prepare the ground for the arrival of international companies into the market. Dr Hashemi commented that a window has been opened for cooperation with the rest of the world and that this opportunity is open to everyone. He also revealed that there are plans to renovate and restructure the administration of aviation in Iran, with the objective of enhancing the role and performance of the private sector.

Dr Hashemi also outlined the three driving principles for the development of aviation in Iran: ensuring safety and quality, facilitating immediate development and managing the cost of modernization.

Iranian Civil Aviation Organization president Ali Abedzadeh focused on the development of human resource management in Iranian aviation, outlining how the country is prepared to develop its own professional resources and enter into partnerships with international partners – including JVs and direct investments – to meet the new standards that a modernized, revitalized and rapidly growing Iranian aviation industry will require.

Mr Abedzadeh also commented that Iran plans to reduce the average age of its civil aviation fleet from 20 years to 12 years within the next few years.

Iran is planning to develop an “all sided and comprehensive cooperation” in aviation according to Mr Abedzadeh. Regulation is of paramount importance and Iran is moving to cooperate with the FAA, EASA and other regulators to ensure cooperation in all forms with international partners.

Iran Air chairman & MD Farhad Parvaresh revealed that the airline has a major 10 year development plan, and the initial stage is to be implemented over the next three to four years. Expansion plans include enhancement of its domestic and international networks with new aircraft, and there also is the possibility that Iran Air will introduce an ‘air taxi’ commuter airline subsidiary, dedicated to operating 50 to 100 seat aircraft on domestic routes.

Mr Parvaresh commented that Iran Air would also like to establish a major transit hub in Iran, but the country lacks the requisite aviation facilities at the moment. He also expressed optimism that the airline will be readmitted to IATA’s billing and payment systems, which would tremendously simplify its revenue collection and payments for overflights, airport fees and other areas.

Meraj Air VP Iraj Ronaghi informed the conference that the airline plans to increase its capacity by around 150% within the next five years. Meraj Air plans to add two regional bases and new regional jets in Iran to serve tourism destinations, such as the islands of the Persian Gulf. The airline operates a fleet with around 2000 seats, intending to add another 2000 seats in the next two to three years, then another 1000 seats within the five year window.

Kish Air CEO Sadat Akhavi noted that in the short term it would be most beneficial for Iranian airlines to lease aircraft, or acquire aircraft through lease-to-purchase agreements. In the longer term, the preferred strategy for Iranian airlines will be to buy and own the aircraft outright. Mr Akhavi confirmed that Kish Air is involved in negotiations with aircraft manufacturers.

Turkish Airlines CEO Dr Temel Kotil made bold predictions for the future of aviation in Iran, forecasting that demand for travel to the country will double within two years. He also noted that Iran’s airlines alone will not have the ability to meet this expansion in demand, and that there will be plenty of room for other airlines in the market.

Amadeus, VP Airline IT & Distribution MENA Maher Koubaa had a similar point, noting that the opportunity in Iran is not just for Amadeus, or the Iranian airlines, but also for international airlines. The vital question for the market, according to Mr Koubaa, is how will Iranian airlines compete, or partner, with new international competitors.

ICAO regional director Middle East Mohammed Smaoui closed out Day 1 of the CAPA Iran Aviation Summit 2016. He stressed the overall importance of Iran to regional and global aviation. Iran controls 1.6 million sqkm of airspace and its overflight traffic has more than doubled in the past 15 months, to better than 1000 aircraft movements per day in some sectors. Most of this increase has been due to safety factors, with airlines rerouting flights to avoid conflict zone airspace. Mr Smaoui stressed that Iran has done commendable work in keeping the level of aviation safety high in the country during its years of sanctions, but did note that Iran does need significant upgrade of its ATM sector, particularly PBN, which is one of the key priorities for ICAO’s global ATM performance improvement objectives.

Day 2 of the CAPA Iran Aviation Summit on 25-Jan-2016 promises to be equally informative. Speakers include:

Iranian Government, Deputy Minister for Legal & International Affairs, Ministry of Foreign Affairs, Seyyed Abbas Araghchi

Iran Airports Company, CEO & Chairman, Rahmatollah Mahabadi

AirAsia X, CEO Benyamin Ismail

CAPA - Centre for Aviation, Executive Chairman, Peter Harbison

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