Boeing, Airbus Can Only Help Iran on Safety Matters

WASHINGTON, D.C. (TheStreet) -- Neither Airbus nor Boeing(BA) can do business with Iran's airlines, with one notable exception: Both are able to provide support on safety of flight matters to the carriers, subject to government approval.

Such matters could involve supplying parts considered critical to safe operations, dissemination of information about inspection procedures that relate to a Federal Aviation Administration airworthiness directive, airplane manual updates that are driven by safety concerns or other assistance.

Last week, the U.S. Treasury said Mahan Air Iran's second largest airline, would be sanctioned because of its relationships with the terrorist group Hezbollah and the Islamic Revolutionary Guard Corps-Quds Force, which allegedly hatched a plot to murder the Saudi Arabian ambassador to the U.S.

The designation means U.S. persons cannot do business with Mahan Air, Iran's second largest airline, and the carrier's U.S. assets were frozen. It is intended primarily to restrict Mahan's access to banks, said Michael Zolandz, a partner at law firm SNR Denton in Washington and an expert on sanctions law.

Earlier this year, the Treasury imposed similar sanctions on Iran Air, Iran's flag carrier. Both Air and Mahan Air serve cities around the world from Tehran's Iman Khomeni International Airport, and both have Airbus and Boeing aircraft in their fleets, although in recent decades neither manufacturer has sold new aircraft to the carriers.

Mahan's destinations include Birmingham, England, and Dusseldorf, Germany, according to its route map.

According to Boeing spokesman Tim Neale, "under the U.S. sanctions currently in place against Iran, we cannot have any dealings with Iran's airlines even on safety of flight matters unless the U.S. government gives us permission to do so. "

Such instances are rare, Neale said. "The last time the government licensed us to provide a part for an Iranian commercial jet was in 2000, when we were licensed to install an FAA-mandated strut modification kit on an Iranian 747 at a location outside of Iran."

As for Airbus, "Europe has imposed strong sanctions vis-a-vis Iran," said spokesman Clay McConnell. "For all transactions valued at more than 10,000 Euros, we need prior authorization from the French government," even for safety of flight transactions.