July 4, 2018 / 4:47 PM / 15 days ago

ATR seeks U.S. approval to deliver planes to Iran before cut-off

LONDON/PARIS (Reuters) - Europe’s ATR is urging the Trump administration to unblock the export of about six regional planes to Iran, warning of “serious damage” to its finances from the breakdown of deals negotiated with Washington’s approval before a change of foreign policy.

Deliveries of ATR turboprops were halted in May after the United States - which must approve exports of planes containing over 10 percent U.S. parts - withdrew from a 2015 international nuclear deal with Iran.

Although Washington announced a 90-day wind-down period for business conducted under the accord, aircraft deliveries halted after the U.S. Treasury said it would revoke export licenses.

ATR Chief Executive Christian Scherer said the Franco-Italian company had applied for new licenses to allow some outstanding business to be completed before the August deadline and was now in discussions with the U.S. Treasury.

He told Reuters ATR would argue that it had sold aircraft “in good faith” under U.S. government licenses and that blocking the rest of the deal would cause ATR “serious damage”.

Asghar Fakhrieh-Kashan, senior advisor to Iran’s roads and urban development minister, said six aircraft were involved.

“The money to pay for these planes is ready. If they can get the license from the Americans, we will pay the company for the six ATR planes,” he told Iran’s Mehr news agency.

The U.S. Treasury could not be reached for contact on a U.S. public holiday.

IranAir ordered 200 aircraft under the nuclear deal, under which most international sanctions were lifted in exchange for restrictions on Iran’s nuclear activities.

These included 20 turboprops from ATR, co-owned by Airbus and Italy’s Leonardo (LDOF.MI). Of those, eight have been delivered and the rest are in various stages of assembly.

Scherer said 6-8 aircraft would be ready for delivery by the August deadline.

The pact’s unraveling leaves ATR with up to 12 undelivered aircraft, equivalent to 15 percent of annual output. Planemakers try hard to avoid such “white tails” since they divert cash and delay revenues. They may also have to be resold at lower prices.

Finding alternative homes may be complicated by the fact that ATRs built for Iran contain some features which are not standard in aircraft designed for short hops, since Iran’s mountainous geography requires extra emergency oxygen supplies.

Fakhrieh-Kashan said Airbus had also applied for licenses to deliver more airplanes. It sold 100 jets to Iran and has delivered three.

“Nothing can be predicted, as we are dealing with an unpredictable person (Trump),” Fakhrieh-Kashan told Mehr.

Trump has said the nuclear accord does not address Iran’s ballistic missile program, nuclear activities beyond 2025 or its role in regional conflicts.

Airbus said it would follow all regulations on Iran, but declined further comment.

Reporting by Bozorgmehr Sharafedin, Tim Hepher; Editing by Kirsten Donovan

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