Syria says US approves Syrianair Boeing overhaul

DAMASCUS Feb 10 (Reuters) - The U.S. government has granted Boeing (BA.N) permission to overhaul two 747 aircraft belonging to flag carrier Syrianair in a step that could herald an easing of U.S. sanctions on Syria, official media said on Tuesday.

But a source familiar with contacts over the repair of the grounded planes said U.S. sanctions in any case allowed the supply of spare parts under specific conditions that Syrianair met.

"This was a purely technical decision taken by the U.S. authorities after a long review. It does not represent any change in the sanctions regime," said the source, who requested to remain anonymous because of the sensitivity of the issue.

Syria is hoping for a rapprochement with Barack Obama's administration after U.S. sanctions imposed under George W. Bush damaged the economy and hampered plans to expand the tiny fleet of Syrianair by buying planes from Airbus (EAD.PA).

The government received a letter from the U.S. Commerce Department on Feb. 5 informing Damascus that Boeing could go ahead with a requested repair of the two jets that were taken out of service in 2008, official media quoted Transport Minister Yarub Badr as saying.

"The minister expressed hope that the permission will reflect positively on the current negotiations to import Airbus planes to Syria," the official news agency said.

There was no immediate official U.S. comment.

Airbus and Syrianair signed a letter of intent last year for a multibillion dollar order, which involved the possible lease and purchase of a total of 54 aircraft until 2028, and help by Airbus to restructure Syrianair.

The first phase called for Syrianair to buy or lease eight Airbus in 2009. But the U.S. sanctions complicated the deal, since the planes use American components.

Airline executives said the initial cooperation agreement between Airbus and Syria could only progress if a legal way was found to conform to the sanctions.

FRENCH "OPTIMISTIC"

French officials assured the United States that Airbus had no intention of breaking the sanctions but initiated contacts with the U.S. government to see if an exemption could be granted to Airbus, diplomats in the Syrian capital said.

"The French are optimistic about a breakthrough under the Obama administration," one of the diplomats said.

The issue is politically sensitive since Airbus is competing along with a U.S. partner for a $35 billion Pentagon tanker refuelling deal.

Damascus and Washington are are on poor terms because of Syria's support for the Palestinian group Hamas and the Lebanese movement Hezbollah. The United States also accuses Syria of allowing Islamist fighters to infiltrate Iraq.

France started re-engaging Damascus after the Syrian government embarked on now stalled peace talks with Israel and a protracted political crisis eased in Lebanon.

Syria, which has endured years of isolation by the West, would view a deal to renew its sanctions-hit fleet as a further boost to its rehabilitation on the world stage.

Syrianair has 5-6 operating planes and more than 5,000 employees. Rami Makhlouf, a Syrian tycoon who is under specific U.S. sanctions for alleged corruption, granted Syrianair a 25 percent sake in an airline he is setting up with Gulf investors. (Editing by Charles Dick)