“Antonov” receives an offer it can(not) refuse

Iran intends to purchase 20 An-148 jet planes and as many An-140 turboprops. This is reported by Iranian media with a reference to one of the leaders of the Republic’s air traffic. There is no official confirmation or any details yet, but the chances that it will be confirmed are quite high. According to Iranian experts, by 2021 the country will need about 600 passenger aircraft, 270 with the capacity of 100 to 150 seats. Iran is interested in developing its own aircraft industry, which is facilitated by its cooperation with Ukraine and Russia. Thus, the enterprise HESA creates An-140 under the brand name Iran-140 (regional flights aircraft for 52 passengers). Iran bought manufacturing license in 2003, and the first plane was produced in 2003.

However, a question arises whether Iran really plans to buy 20 An-140, considering it can manufacture it on its own territory. These plans can be explained by the fact that the pace of Iran-140 production is slow: HESA has only produced 14 aircraft, though initially it was planned to manufacture 12 airplanes yearly.

An-148/An-158 (short-haul aircraft for 80-99 passengers) seem to be more likely in demand now. Iran wants to begin the assembly of these models as well. The country decided to start with the production of relatively small passenger aircraft with approximate capacity of 50 seats, then launch the production of a 100-seat liner, and eventually move to larger planes. At the end of the last year, there were negotiations with Antonov State Company about the purchase of its 16 An-148 aircraft and production of 64 aircraft by HESA.

Local mass media state that the future purchase of An-140 and An-148 may cause serious concerns within the Iranian society. As Iras states, “due to an increased number of crashes and widespread discontent of citizens, a project on reducing the use of Russian aircraft for passenger transportation was launched a few years ago.” But the periodical admits that it was not the manufacturers who were to blame for the crashes. Besides the human factor, one of the reasons it names is that Iran used to buy old Russian planes, “which were almost always put to use without a major overhaul.” Besides, there have been no accidents with passenger aircraft in Iran over the past few years.

But the concern is mainly not about the discontent of potential passengers, but about the ability of Ukraine and Russia to fulfill the contract (An-148 is produced jointly by Antonov State Company and Voronezh Aircraft Joint Stock Company). An-148 performed its maiden flight in 2004, and use of the first serial planes started in 2009. Since then, only 26 planes have been built, which are used mainly in Russia. Neither Ukrainians nor Russians managed to reach the necessary production pace (25 to 30 planes per year), because an expensive modernization of manufacturing is required. Taking into consideration the presence of other customers for An-148, a question arises: how long is Iran willing to wait for its turn?

However, at the moment Iran is not in a position to dictate strict terms: due to suspicions of nuclear weapons development, trade restrictions were imposed on the country by the US and the EU, which impede the purchase of Western aircraft. But the interest is nevertheless still there. Recently the Iranian government declared its readiness to buy Boeing and Airbus if the sanctions should be lifted, but they remain in force as of now. Moreover, the US House of Representatives has passed a new law which enhances economic sanctions against Iran. Iranian oil exports are increasingly shrinking, the US government also aims to cut its export by 2015.

It looks like there are no reasons for Ukraine to fear the wrath of the United States: the UN resolutions apply to military aircraft only, so we can sell civil planes safely. These days the EU court decided to cancel the EU sanctions for the leading shipping Iranian company IRISL. This decision was motivated by the fact that the European Union failed to present evidence of it aiding the supposed Iran program on nuclear weapons development. Ukraine is not involved in this international conflict.

Meanwhile, sanctions imposed on specific countries open promising markets for Ukrainian aviation industry. There was information earlier this year that at Aviant works an An-148 and an An-158 are being built for the North Korean company Air Koryo (the United States imposed an embargo on North Korea). In February, Reuters reported Ukraine’s agreement with Sudan (with which the United States has limited trade relations) concerning the purchase of five liners An-148/158.

It is important to gain a foothold in such markets, even if we have to supply spare parts there in the future. Especially considering the fact that selling airplanes to Russia is constantly risky, the dependence on politics is too high. And we should not hope for the Western European market, since competition is very tough there. For example, from the Franco-Italian aviation consortium ATR. In particular, it manufactures a regional airplane ATR-72, which competes with An-140. This is not so much the matter of quality as of better opportunities for the Europeans to lobby their interests, and of a more extensive expertise in operating their aircraft.