IranAir dreams of regaining its crown from Gulf states usurpers

IranAir dreams of regaining its crown from Gulf states usurpers
An Iran Air Airbus at IKA airport.
By bne IntelliNews October 26, 2016

The Netherlands’ national airline KLM kicked off its new Amsterdam-Tehran service this week with an aircraft aptly named "City of Tehran". The new plane, which carried a delegation of Dutch business people along with high-ranking ministers, was the first KLM plane to touch down in Tehran in more than five years. 

KLM is just one of a slew of new airline services to Iran being offered by global airlines. Iran’s government and the state-owned IranAir are big proponents of opening up Iran’s skies to foreign airlines, .

The KLM flight landed at Tehran’s Imam Khomeini Airport late on October 22 with a Boeing 777-200. The new flight is scheduled four times a week, on Tuesdays, Thursdays, Fridays and Sundays, according to the airline.

KLM’s managing director and chief operating officer, René de Groot, said he was happy his airline had restarted flights to the Islamic Republic. “Of course, we hope that the sanctions will not come back and we can grow even with more frequencies,” he said.

The Dutch operator’s arrival follows that of Thai Airways, British Airways, Lufthansa, Air France and Kazakh Airlines, which have all restarted flights in recent months. For the Thai national flag-carrier, it was a brand new route, with a specially designed Islamic-style uniform for its air hostesses – much to the ridicule of Iran’s social media users.

However, while the Europeans and Asians begin to mop up the under-served demand of Iran's middle and upper classes, Iran’s airlines will need years to catch up.

IranAir under the Shah was the leading airline in the region. Now Iran's government and the airline hope to eat into the market share of its Persian Gulf rivals such as Emirates and Qatar Airways, which have grown into global giants during the past two decades while it was sleeping

Iran is not lacking in ambition here. Following the removal of sanctions on Iran in January, President Hassan Rouhani made good on his 2013 election promise that he would try to lift the country’s airlines back to global levels once again.

The sheer scale of new orders from Iran’s flag carrier IranAir left the global aerospace community dumbstruck. In a matter of days after sanctions were removed, a delegation headed by the president went to Paris to sign an agreement with Airbus to order an incredible 118 brand new planes.

Following this, another delegation headed to the French-Italian turboprop aircraft builder ATR and ordered an additional 40 regional planes, which would replace Iran’s ageing stock of Russian-built YAK-40 and Tupolev aircraft, which date back to the early 1990s.

However, the icing on the cake came on September 22 when the Obama administration gave special permission for a jaw-dropping deal of 238 planes from US-based Boeing, estimated to be worth $50bn, which would be one of the biggest orders ever placed with the American aerospace group.

In addition to the sale of the planes, the US administration also allowed plane parts and American experts to head to Iran to teach the Iranians how to use the new technology – though none is believed to have arrived yet.

On the ground boost

Meanwhile, Tehran’s Imam Khomeini Airport (IKIA), which currently has only one major international terminal, has signed a deal with Aéroports de Paris to redevelop the huge complex in another billion-euro deal.

The scale of the planned redevelopment of the IKIA site has made foreign airline CEOs express their envy in no uncertain terms. The chief executive officer of British Airways, Alex Cruz, said to reporters while opening his new six-weekly flight service, “Unlike Heathrow, where we have a space problem, you do not have a space problem here in Tehran… you can build as much as you like.”

However, there is an incredible amount of redevelopment that needs to be done at the IKIA site.

As the CEO of IranAir, Farhad Parvaresh, said at a recent conference in Dubai: “We do not have enough infrastructure for the A380s yet”, adding that terminal buildings, jetways and transit facilities do not meet modern requirements for such airplanes.