Charles D'Alberto is a CEO & Founder of Perla Group International.
He has vast experience in bringing startups to successful companies and pioneer in the VSAT industry having introduced many new technologies to emerging markets.
An avid helicopter pilot with a passion for the aviation industry.
Saturday, February 6, 2016
Iran is targeting more than fleet renewal after the lifting of aviation sanctions - Charles D'Alberto
AVIATION geeks love Iran Air, but for all the wrong reasons. Decades of sanctions have left Iran's flag-carrier with one of the oldest fleets in the world, featuring museum-vintage aircraft like a 39-year-old Boeing 747SP, the only passenger aircraft of its type still in service. Blocked from ordering Western-built jets for three decades, Iran Air and the country's 15 other carriers have extended the lives of their obsolete planes while scouring the black market for second-hand ones. The results are predictable: 37 crashes of Iranian aircraft since the turn of the century, claiming more than 900 lives.
It was against this sobering backdrop that Tehran hosted the CAPA Iran Aviation Summit in January, the country's first international conference since the lifting of nuclear sanctions this year. Abbas Akhoundi, Iran's transport minister, opened the summit by inviting foreign companies from all countries—except Israel—to assist with the reconstruction of Iran's aviation sector. Within days Airbus had announced an order by Iran Air for 118 new aircraft—a tentative deal sweetened by the European manufacturer's promise to assist with training, maintenance, air navigation and regulatory development. It includes a commitment for 12 A380s, the double-decker plane that only the very largest network carriers can fill. Iran Air also agreed to buy 20 turboprops from ATR, a French-Italian manufacturer. America's Boeing has not yet scored any orders, though with Iran pegging its requirement at 500 aircraft over ten years it is still in the running.
More interesting than the size of the Airbus contract was the planned pace of deliveries. Asghar Fakhrieh Kashan, deputy transport minister, said the order will be fulfilled in its entirety by 2022. If true, that would mean Iran Air quadrupling the size of its operational fleet in less than a decade (almost half of its aircraft are currently held in storage). The pledge goes well beyond merely re-fleeting the national carrier. It also lays down an ambitious roadmap for Iran Air to rival the new breed of Gulf super-connectors that rose to prominence in the UAE and Qatar during its lost decades.
That may be news to Iran Air's own management, who say they want to “maintain our current schedules” for three years while focusing on modernising their systems. Executives from other Iranian airlines are equally cautious, stressing the need to re-train pilots and engineers for the newest generation of aircraft. Iran Aseman Airlines, the country's largest domestic operator, sees leasing planes and acquiring second-hand units as a more practical near-term solution. Here, too, there are problems: the legal framework through which leasing companies re-possess their aircraft has not yet been tested in Iran, prompting at least one Gulf-based lessor to steer clear of the market. Airport infrastructure is another concern. Rapid passenger growth will heap pressure on Imam Khomeini International Airport, Tehran's international hub, which handles less than one-tenth the traffic of Dubai International Airport. Tight visa restrictions will need to be scrapped. In the political sphere, the threat of sanctions being reimposed if the country violates the terms of its nuclear deal—and a potentially hostile American government after this year's presidential election—could scupper everything.
Despite the challenges, Temel Kotil, the boss of Turkish Airlines, another regional goliath, says passenger numbers in Tehran could overtake Dubai within a decade “if they mean it”. He says Tehran's geography is better than Dubai's for some intercontinental stopovers—Europe to South-East Asia, for example—and unlike Dubai it has a vast population to tap into. Iran's airlines have also become lean and wily after decades of sanctions, slashing their cost bases and finding creative solutions for unorthodox challenges. Even so, leapfrogging the world's largest international hub is a tall order. Iran Air and others will need to run before they sprint.