Boeing Bags Iran Air Deal Worth $17 Billion



Iran Air deal

On December 11, 2016, Boeing (BA) announced a deal with Iran Air for 80 aircraft worth almost $16.6 billion at list price.

The order includes 50 single-aisled 737 MAX 8s, 15 long-haul 777-300ERs, and 15 wide-body 777-9s. The first few aircraft are due for delivery in 2018.

The Memorandum of Agreement was signed in June 2016, and the US government issued the license to Boeing in September.

Boeing is the largest commercial jet manufacturer in the United States and the world’s second-largest manufacturer after Airbus. It’s also the second-largest defense contractor in the United States after Lockheed Martin (LMT), and it’s followed by Raytheon (RTN), General Dynamics (GD), and Northrop Grumman (NOC). Boeing forms ~5.7% of the Dow Jones Industrial Average ETF’s (DIA) portfolio.

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Airbus has a deal, too

Airbus secured a deal with Iran Air in January 2016. The deal was for 118 aircraft worth almost $27 billion at list price. The order included 21 aircraft from the A320ceo (current engine option) family, 24 from the A320neo (new engine option) family, 27 from the A330ceo family, 18 from the A330neo (-900) family, 16 A350-1000s, and 12 A380s.

Since Airbus imports almost 10% of its aircraft parts from the United States, it also required permission from the United States before finalizing the deal with Iran. Similar to Boeing, it received permission in September 2016.

Series overview

In this short series, we’ll try to understand how Boeing’s deal with Iran Air could affect US jobs. We’ll also examine the implications of Donald Trump’s presidency for Boeing.


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