WarSclerotic

A Chinese state firm on Wednesday ruled out selling passenger planes to Iran to help the Islamic republic revive fleet renewal plans, while a Russian executive suggested Moscow would be wary of putting its own programs at risk of U.S. retaliation.

The move underscores the challenges Iran faces in rekindling plans to import planes after the U.S. reimposed sanctions, though Iran Air reiterated on Wednesday it would welcome offers from suppliers not subject to restrictions on the export of U.S. plane parts.

Deals to buy 200 aircraft from aviation giants Airbus, Boeing and European turboprop maker ATR have virtually all stalled after the United States withdrew from a 2015 nuclear agreement between Tehran and world powers and reimposed sanctions on firms including Iran Air.

Iran’s search for other suppliers was a talking point on the sidelines of Airshow China this week, where China promoted its growing aircraft industry as it looks to break into foreign markets for planes such as its long-delayed ARJ21 regional jet.

Asked whether Iran had shown interest in buying Chinese airplanes, Zhao Yuerang, general manager of manufacturer Commercial Aircraft Corporation of China, said, “No, we cannot sell to Iran. Iran is off the table.”

Pressed on China’s ability to sell the ARJ21 to Iran, he added, “We need to abide by regulations of both countries.”

In May, the U.S. Treasury’s Office of Foreign Assets Control revoked licenses to sell passenger jets to Iran that are required for any plane with more than 10% U.S. parts, regardless of where it is made.

Iran Air has said it is looking to buy planes from any company not requiring the U.S. permits and may consider Russia’s Sukhoi Superjet 100.

Asked at Airshow China in Zhuhai whether Moscow was in talks to sell the Superjet to Iran Air, a senior official with state holding company Rostec declined to comment in detail.

“This is a sensitive issue,” Viktor Kladov, Rostec’s director for international cooperation and regional policy, said. “You understand why, because we cannot endanger the whole Superjet program.”

Besides controlling exports for aircraft containing over 10% U.S. parts, analysts say the United States sets the tone for global aviation through its benchmark system of safety regulation and the widespread use of the dollar in plane deals.

Kladov said Russia’s industry would continue to follow international standards on regulation and aircraft safety but would strive to be independent commercially.

Rostec is already doing some deals in Russian and other currencies, he added.