Iran and the SSJ – an ongoing courtship

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The Russian side has been the more vocal; frequently advising the world that an SSJ order from Iran is imminent.  Today there is news that might explain the lack of progress to date.

The OFAC has been a thorn in the side of any aerospace OEM trying to do business in Iran.  Since so much of what goes into a modern commercial aircraft is made in the USA, OFAC gets to play a spoiler role if that content is greater than 10%.

Sukhoi has apparently managed to reduce USA-content to below 10%.  This means Iran can acquire the SSJ without a license from OFAC.  Importantly, this time the news came from the Iranian side.  The cited article offers two other useful data points: Iran needs regional jets and the SSJ pricing is between $20-25m.

We assess the chances of a deal for the SSJ in Iran now to be higher than before.

The economy has to improve its air travel access to move forward. Iran’s economy has been stifled by aging aircraft and limited new aircraft that kept air travel way below what it might have been.  Moreover, if the pricing on the SSJ is really where deals are being considered, then Iranian airlines are looking at an attractive offering.  Our pricing guidance in the west for the SSJ has been somewhat higher than the $25m cited in Iran.  It would seem reasonable that the Iranian pricing does not include the Venice installed Pininfarina cabin.

© 2018, Addison Schonland. All rights reserved.

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