The US decision on Iran means lost business opportunities, says CEO of plane leasing company
- The U.S. decision to restore sanctions on Iran eliminated the opportunity to do business in the country for a major aircraft leasing company, its CEO told CNBC.
- Iran needs about 400 to 500 new aircraft to modernize its fleet, according to Firoz Tarapore, CEO of Dubai Aerospace Enterprise.
- He said leasing would have been a way for Iran's airlines to not only modernize their fleet but also grow more quickly.
The U.S. decision to restore far-reaching sanctions on Iran closed the door for a major aircraft leasing company's plans to do business in the country, according to its CEO.
"I think, with yesterday, the opportunity to do business for us is ... not there anymore," Firoz Tarapore, chief executive of Dubai Aerospace Enterprise, told CNBC's "Capital Connection."
When the Joint Comprehensive Plan of Action, known commonly as the Iran nuclear deal, was signed in 2015, companies hoped to be able to step in and meet the country's demand for new planes, he said.
"Iran, in our opinion, needs somewhere between 400 and 500 new aircraft to modernize its fleet," Tarapore said on Wednesday. "The average age of its fleet today is 20-plus years old and a lot of the opportunities would've come through leasing, because leasing allows airlines in Iran to grow very quickly."
Tarapore explained that Iran's airline sector faced many obstacles that were already not being addressed. He added that Dubai Aerospace Enterprise does not do any business in Iran at the moment.
On Tuesday, President Donald Trump announced he will withdraw the U.S. from the Iran nuclear deal and restore sanctions aimed at severing Iran from the global financial system. The landmark 2015 deal lifted sanctions on Iran that previously hurt its economy and cut its oil exports roughly in half. In exchange for sanctions relief, Iran accepted limits on its nuclear program and allowed international inspectors into its facilities.
Tarapore said his company will continue to do more business with other carriers in the region. He pointed to the phenomenal growth rate of those airlines over the years, and said they are set to become stronger as their business models mature.
Last month, the company said it leased out its first new Boeing 787-9 Dreamliner to Bahrain's Gulf Air. In total, the company has said it is set to lease out five Dreamliners to Gulf Air throughout this year.
"Today, we have nearly 400 aircraft on lease to different airlines around the world," Tarapore said. "We have 115 customers around the world in several different countries. Gulf carriers for us represent a fairly small percentage of our business, but nonetheless, it is our home and we pay very close attention to what's happening."
— CNBC's Tom DiChristopher contributed to this report.