Lufthansa in Talks for Iran Air Catering Deal
DUBAI (Dispatches) -- Lufthansa is in talks with Iran Air to provide catering, maintenance and pilot training as it seeks to take advantage of emerging business opportunities in the country, executives at the German airline group said on Wednesday.
The talks are the latest in efforts by Western aviation companies to use Iran's return to the world markets to their advantage in order to cope with a downturn in global demand and provide homes for airplanes orphaned by reversals in the growth plans of airlines elsewhere.
Foreign companies have been vying for contracts in Iran since economic sanctions were lifted last year in return for Tehran curbing its nuclear program.
"We are in very, very intense discussions, actually almost on a weekly basis," Karsten Zang, Lufthansa's regional director for the Persian Gulf, Iran, Pakistan and Afghanistan, said at a press briefing in Dubai.
However, a Lufthansa spokesman later told Reuters by email that "the talks with Iran Air are just held to explore business opportunities in the areas of catering and maintenance. There are however no concrete plans for a cooperation.
"Lufthansa Group subsidiaries LSG Sky Chefs, Lufthansa Technik and Lufthansa Pilot Training are seeking the contracts with Iran Air whilst the group is also in talks to provide services to other Iranian aviation firms, Zang said.
"We are talking with Iran Air because their new aircraft are coming. They need training, of course, and we have the experience in all of these fields but we can't give timelines," Zang said.
The lifting of sanctions has not brought the economic boom to Iran that many foreign companies had hoped for. Uncertainty over U.S. President Donald Trump's attitude to the nuclear deal, as well as remaining sanctions that limit international banking with Iran, are seen as deterring some would-be investors.
The Trump administration said on Tuesday it was launching a review of whether lifting remaining sanctions against Iran was in U.S. national security interests, while acknowledging that Tehran was complying with the nuclear deal.
"We are hoping this business will pick up because the market as such is a huge market with high potential," Lufthansa Group's Senior Vice President for Sales Heike Birlenbach said.
Last year the group axed plans for its budget carrier Eurowings to launch a service to Tehran after deciding the demand was not there, although its other airlines Lufthansa, Austrian and Swiss already fly to Iran.
Trump's executive orders, since blocked, banning citizens of some Muslim-majority countries, including Iran, from travelling to the United States has shifted travel flows to Europe as a holiday destination for Iranians flying with Lufthansa.
"It caused lots of insecurity for our customers," Birlenbach said of the travel bans.
Emirates said on Tuesday bookings to Iran and the Indian Subcontinent had slowed since the first travel ban in January.
Iran has signed orders for 200 new Western-built aircraft for Iran Air, taking delivery so far of two new Airbus and an A321.
Industry executives say they were left on the planemaker's books when their Colombian buyer, Avianca, balked at taking delivery. Such orphan planes are often known as 'white tails'.
Iranian government officials have however been forced to defend the reshuffling from suggestions that Iran is getting cast-off airplanes.
They stress the Avianca jets, for example, had been sitting unused for two years and had never flown commercially.
"It is good for Airbus and Boeing, but this is part of the game that everyone knows," Deputy Roads and Urban Development Minister Asghar Fakhrieh-Kashan told Reuters in remarks published on Tuesday.
The talks are the latest in efforts by Western aviation companies to use Iran's return to the world markets to their advantage in order to cope with a downturn in global demand and provide homes for airplanes orphaned by reversals in the growth plans of airlines elsewhere.
Foreign companies have been vying for contracts in Iran since economic sanctions were lifted last year in return for Tehran curbing its nuclear program.
"We are in very, very intense discussions, actually almost on a weekly basis," Karsten Zang, Lufthansa's regional director for the Persian Gulf, Iran, Pakistan and Afghanistan, said at a press briefing in Dubai.
However, a Lufthansa spokesman later told Reuters by email that "the talks with Iran Air are just held to explore business opportunities in the areas of catering and maintenance. There are however no concrete plans for a cooperation.
"Lufthansa Group subsidiaries LSG Sky Chefs, Lufthansa Technik and Lufthansa Pilot Training are seeking the contracts with Iran Air whilst the group is also in talks to provide services to other Iranian aviation firms, Zang said.
"We are talking with Iran Air because their new aircraft are coming. They need training, of course, and we have the experience in all of these fields but we can't give timelines," Zang said.
The lifting of sanctions has not brought the economic boom to Iran that many foreign companies had hoped for. Uncertainty over U.S. President Donald Trump's attitude to the nuclear deal, as well as remaining sanctions that limit international banking with Iran, are seen as deterring some would-be investors.
The Trump administration said on Tuesday it was launching a review of whether lifting remaining sanctions against Iran was in U.S. national security interests, while acknowledging that Tehran was complying with the nuclear deal.
"We are hoping this business will pick up because the market as such is a huge market with high potential," Lufthansa Group's Senior Vice President for Sales Heike Birlenbach said.
Last year the group axed plans for its budget carrier Eurowings to launch a service to Tehran after deciding the demand was not there, although its other airlines Lufthansa, Austrian and Swiss already fly to Iran.
Trump's executive orders, since blocked, banning citizens of some Muslim-majority countries, including Iran, from travelling to the United States has shifted travel flows to Europe as a holiday destination for Iranians flying with Lufthansa.
"It caused lots of insecurity for our customers," Birlenbach said of the travel bans.
Emirates said on Tuesday bookings to Iran and the Indian Subcontinent had slowed since the first travel ban in January.
Iran has signed orders for 200 new Western-built aircraft for Iran Air, taking delivery so far of two new Airbus and an A321.
Industry executives say they were left on the planemaker's books when their Colombian buyer, Avianca, balked at taking delivery. Such orphan planes are often known as 'white tails'.
Iranian government officials have however been forced to defend the reshuffling from suggestions that Iran is getting cast-off airplanes.
They stress the Avianca jets, for example, had been sitting unused for two years and had never flown commercially.
"It is good for Airbus and Boeing, but this is part of the game that everyone knows," Deputy Roads and Urban Development Minister Asghar Fakhrieh-Kashan told Reuters in remarks published on Tuesday.