Lack of Helicopters Shows Sanctions Impact on Iran Flood Response

In a brief statement issued on Tuesday, US Secretary of State Mike Pompeo offered condolences to “the victims of the recent floods in Iran” while claiming, “it is the [Iranian regime’s] mismanagement that has led to this disaster.” Pompeo asserted that the Trump administration “stands ready to assist and contribute to the International Federation of Red Cross and Red Crescent Societies, which would then direct the money through the Iranian Red Crescent for relief.”

Pompeo’s statement appears to have been spurred by reports that the Iranian Red Crescent Society (ICRS) is unable to accept international aid due to a lack of viable banking channels.  Ali Asghar Peyvandi, the head of the Iranian Red Crescent Society, told reporters in Iran that “Prior to the [reimposition of US] sanctions, we had some Red Crescent accounts connected to SWIFT, and we sought international aid through them. However, at present, these accounts have been sanctioned and there is no possibility for money transfers from other countries.”

These statements have led to questions as the role sanctions may have played in Iran’s unconvincing response to unprecedented floods, which have killed over 50 people and caused widespread devastation. But in the context of rescue and relief operations, the ability to raise funds after a disaster matters far less than the level of preparedness before the disaster, especially in a country like Iran with its substantial financial resources. So even if sanctions are impeding the delivery of financial aid, a more important question is whether or not sanctions had a meaningful impact on preparedness. A look at Iran’s failure to procure rescue helicopters helps answer that question.

On Tuesday, Iranian Foreign Minister Javad Zarif pointed to sanctions-related impediments in a tweet, stating, “Blocked equipment includes relief choppers.” Placing blame on the US, Zarif declared, "This isn't just economic warfare; it's economic TERRORISM.” Zarif’s anger likely stems from the fact that Iran had attempted to purchase much-needed search-and-rescue helicopters over the last few years, but was thwarted by both the failed implementation of sanctions relief under the JCPOA as well as the reimposition of sanctions by the Trump administration.

The Iranian Red Crescent Society (IRCS) operates an air rescue fleet that it has long needed to modernize. In 2015, with the prospect of sanctions relief on the horizon, IRCS approached foreign suppliers with the intention to purchase 28 new helicopters to augment its fleet of Russian-made Mil Mi-171 cargo helicopters and Iranian-made Bell-412 utility helicopters. Airbus Helicopters came forward as an early suitor and collaborated with ICRS on corporate social responsibility projects to help build trust. In 2016, the Airbus Foundation and ICRS launched a program to “to train thousands of Iranian teenagers aged between 12 and 14 in robotics and resilience techniques, developing their skills to respond to disasters and ensuring safer and more resilient communities for the future.” Even American defense contractor Lockheed Martin, parent company of helicopter-maker Sikorsky, publicly stated that it was studying the feasibility of selling civilian helicopters to Iran.

In 2017, drawing on new funding made available by parliament, the Iran’s Ministry of Health sought to purchase 45 BK-117 air ambulances from Airbus Helicopters configured for rapid response to accidents and medical emergencies in urban areas. A report on the delivery of the first two aircraft notes that Iran had just 21 air ambulances in operation at the time. Just a couple months later, in November 2017, a massive earthquake hit Kermanshah, killing 600 and once again demonstrating the urgency for Iran to upgrade its search-and-rescue capacity.

But the continued presence of US primary sanctions made it difficult for Iran to secure financing for the ICRS and Ministry of Health helicopter acquisitions, slowing the delivery of the aircraft. Helicopters can also be considered “dual-use,” given possible military applications of key parts, and so the deals were subject to significant scrutiny by US and European regulators.  Just 8 helicopters had been delivered to the Ministry of Health by Airbus by the time that the Trump administration withdrew from the JCPOA nuclear deal and reimposed secondary sanctions on Iran. ICRS did not take delivery of any new helicopters. 

Today, ICRS has responded to the unprecedented flooding in Iran with just “23 rescue and relief helicopters,” which are spread thinly across multiple provinces as they deliver supplies and transport the injured to medical facilities. ICRS’s old fleet lacks night vision technology, meaning that only Iran’s military can run rescue operations at night.

Importantly, Iran’s disaster relief agencies were aware of such shortcomings and have tried to address them. Between 2005-2015, the United Nations spearheaded a “global blueprint for disaster risk reduction efforts” called the Hyogo Framework for Action (HFA). Iran was among the 168 participating countries, which undertook a systematic evaluation of their disaster readiness.

Iran’s final assessment report, published in 2013, evaluates Iran’s level of disaster preparedness in regards to whether “financial reserves and contingency mechanisms are in place to support effective response and recovery when required.” The report notes encouragingly that Iran has set aside “national contingency and calamity funds.” But key constraints include “international sanctions and restrictions and lack of cooperation in providing humanitarian equipment” as well as “insufficient equipment when a large-scale disaster happens.” Put more simply, the report concludes that while sanctions have a limited impact on the availability of financial resources for disaster response, they have a serious detrimental impact on the ability to procure adequate rescue equipment. The effort to acquire new helicopters in the brief period in which Iran was provided sanctions relief reflects an attempt to address such shortcomings.

Discussing the impact of sanctions on the rescue operations after the recent floods does not deflect from the Iranian government’s ultimate responsibility for the ineffective response to the disaster. Nor does it excuse the negligence that created longstanding vulnerabilities, such as failing to ensure “risk sensitive regulation in land zoning and private real estate development,” shortcoming identified in Iran’s HFA report. But sanctions will remain even when the floods subside. It is imperative for American policymakers to account for the ways that “maximum pressure” policies directed towards Iran will continue to complicate Iran’s efforts to prepare for the next natural disaster. Facilitating donations will mean little if Iran is unable to procure the equipment that will make its disaster response more effective in the next instance.

Photo Credit: IRNA

For Iranian Passengers, Old Planes and Few Parts Make Air Travel 5.5 More Times Deadly

In November, Kim Hjelmgaard of USA Today reported on the misery and danger faced by Iran’s air travelers as US sanctions return. Hjelmgaard’s interviewed with former airline pilot Houshang Shahbazi who heroically “saved the lives of more than 100 passengers and crew in 2012 when he successfully landed a 747 commercial airplane with a disabled wheel carriage.” His report also included data on aviation safety in Iran complied by Bourse & Bazaar. A closer look at that data is presented here.

To measure the risks posed to air travelers in Iran, it is possible to look to deaths per passenger journey. This is considered the “most accurate measure” for the mortality risks posed by flying as it accounts for the difference between long and short haul flights, which operate different types of aircraft.

Passenger journeys are tabulated by the International Civil Aviation Organization, and accessible via the World Bank’s data portal. Air accidents and fatalities in Iran are recorded by the Air Safety Network, an industry database. For the purposes of this analysis, we will compare global fatalities with passengers fatalities from accidents involving Iranian-registered commercial aircraft within Iran.

The period examined is 1997 to 2017, a 20 year period which includes the most recent available data. This is also the period which covers the intensification of international sanctions on Iran, beginning with the Iran Libya Sanctions Act signed into law by the Clinton administration in 1997. The International Civil Aviation Organization (ICAO), a United Nations body, has long gathered evidence which suggests that US sanctions contribute to the poor safety record of Iran’s aviation industry. A 2010 ICAO Universal Safety Audit found that “Iranian carriers are unable at present to fulfill most requisite ICAO aviation safety and maintenance standards and recommended practices (SARPs)… because they were denied access to updated aircraft and aircraft spare parts and post-sale services around the world.”

Looking to the data on risk of death, Iran’s 20 year average is 1.89 deaths per 1 million passenger journeys. The same figure for the rest of the world is 0.34 deaths. By this measure, flying in Iran is on average 5.5 times more deadly than flying in the rest of the world, in aggregate. Notably, this does not include 2018 figures, a year where Iran has had 66 fatalities.

When depicted in a chart, the ratios help illustrate the frequency with which Iran experiences serious air accidents. There have been accidents in 18 of the last 20 years, with an average of 2 accidents per year. Accidents do not always lead to fatalities. Fatalities are recorded in 9 of the last 20 years. But deaths can quickly mount when accidents occur at higher than normal levels. In 2009, Iran tragically experienced 7 aviation accidents, resulting in 189 deaths.

Statistically speaking, air travel in Iran is still safe. This is in large part due to the efforts of Iranian pilots and maintenance crews to keep aircraft operable despite limited resources. But even if the overall risk of an accident remains statistically low, the risk still far exceeds expected levels. Over the last 20 years, Iran has witnessed 41 accidents, accounting for 6 percent of the global total. But the country accounts for just 0.6 percent of passenger journeys made worldwide in the same period. By this measure, the frequency of accidents in Iran is 10 times higher than the global norm.

To help put the risk of death in context, one French study found that the rate of fatalities for motorcyclists in France is 1.26 deaths per million journeys. By this jarring measure, a journey on a commercial flight in Iran is more dangerous than a journey on a motorcycle. Iranian passengers put up with these risks because they must—it is the only way to visit family, conduct business, or travel for pleasure. But the situation remains unacceptable.

As Shabazi poignantly told Hjelmgaard, "Everybody knows the risks Iranians face in the air… and everybody's scared."

Photo Credit: IRNA

Iran Sanctions Hopes Fly on Possible Delivery of Eight ATR Aircraft

In a recent interview, French Economy Minister Bruno Le Maire expressed optimism for the delivery of eight ATR turboprops to Iran as part of a contract with Iran Air, the country’s national airline.

The encouraging comments come after Le Maire disclosed two weeks ago that the United States had rejected a joint European letter requesting a broad range of waivers and exemptions that had been sent to Secretary of Treasury Steve Mnuchin and Secretary of State Mike Pompeo in June.

In a change of tone, Le Maire spoke of being “hopeful that the United States will provide authorization to deliver these aircraft.” The ATR deliveries, like the three Airbus deliveries made prior to President Trump’s withdrawal from the Iran nuclear deal, are highly symbolic of the hope and expectations for increased trade and investment following the implementation of the Joint Comprehensive Plan of Action (JCPOA).

Le Maire described the intention for ATR to deliver eight aircraft prior to the August 6 sanctions deadline. At least four ATR 72-600 aircraft have been registered to Iran Air. A further four aircraft have been photographed in Iran Air livery, but have not yet had their registrations altered. These eight aircraft can be identified as follows:

• F-WWEP (now EP-ITI)
• F-WWEU (now EP-ITJ)
• F-WWEF (now EP-ITK)
• F-WWEG (now EP-ITL)
• F-WWEC
• F-WWED
• F-WWEE
• F-WWEX

To date, Iran Air has received an initial eight ATR aircraft, having signed a contract in April 2017 for 20 planes. Iran Air is using these planes as part of a new regional service. 

The ATR contract, like so many others, was immediately put in doubt following President Trump's withdrawal from the nuclear deal on May 8 and the announcement that the US would be reimposing secondary sanctions that had been removed as part of the JCPOA. Having already manufactured the aircraft on specification for Iran Air, only to see delivery delayed by financing issues related to sanctions concerns, ATR announced it would seek a new license from the US Treasury to permit the delivery of the aircraft following the US withdrawal form the nuclear deal. 

In July, US Department of Treasury assistant secretary of terrorist financing Marshall Billingslea downplayed the likeliness of any such licenses being granted, telling FlightGlobal, "At this stage, I think we are not in a position to suggest we would be issuing such licenses.” Billingslea cited an inability to “show flexibility on transactions.”

But Le Maire’s comments will give rise to new hope that the US authorities may be adopting a more flexible stance. The French minister disclosed that he has been “negotiating for weeks” with his counterpart, Mnuchin, “fighting so that in the health sector, in the agri-food sector, which are now sanctions exempt, there may be funding channels that remain open."

In the context of this fight, the delivery of the ATR aircraft will prove the most clear indication of US flexibility. There are three reasons US authorities might decide to issue a waiver. First, ATR’s smaller aircraft are used for regional routes. This limits concerns of possible “dual use” of the aircraft for military applications. US authorities have sanctioned Iranian airlines and aircraft for conducting “resupply” flights to the conflict in Syria. Such concerns clouded the Airbus and Boeing contracts for larger commercial aircraft.

Second, unlike Airbus aircraft, ATR turboprops, manufactured under a joint venture between Airbus and Italian aerospace company Leonardo, have limited US parts content. According to ATR executives, US components account for “slightly over 10%” of total parts content, or just above the sanctions threshold. Additionally, the aircraft are already manufactured, meaning that there is no further activities necessary with US entities along the supply chain.

Finally, there is a clear humanitarian justification. As shown by the tragic crash of an Aseman Airlines ATR 72 in February, smaller aircraft are especially vulnerable to accidents caused by aging and poor maintenance. Improving air safety has been a primary consideration for Iranian authorities as they sought to acquire new aircraft following the lifting of sanctions.

A focus on delivering eight turboprops and protecting banking channels for sanctions exempt sectors does not equate to a full-defense of French business interests in Iran. It is clear that Iran contracts of leading French enterprises such as Total, Peugeot, Alstom, and Airbus remain outside the scope of compromise with the US Treasury.

However, even a small victory would be important for Le Maire, as it would push the Trump administration into a mindset of negotiated compromise rather than blanket rejection. The Trump administration is unlikely to announce any softening in their position. So the clearest indicator will be whether the eight ATR aircraft make their long-awaited flights to Tehran. The eyes of a nation will be watching.

Photo Credit: ATR

Iran Air Expands Routes Amid Uncertainty

Despite recent uncertainty surrounding the 2015 nuclear deal, Iran Air has been moving forward with its expansion efforts. The airline's CEO, Farzaneh Sharafbafi, attended last Friday's meeting of the JCPOA Joint Commission. Her presence indicated the significant political efforts being made to facilitate the acquisition of new aircraft which the airline needs to successfully maintain its growth.

Celebrating its 57th anniversary this year, Iran Air began flights from Tehran to Belgrade and Tbilisi on March 10 and is planning to start flights to Budapest, Malmö, and Saint Petersburg later this year. 

With visa restrictions being lifted in Serbia, further optimism points to India. In a joint statement by President Rouhani and Prime Minister Modi in February, Iran and India committed to the opening of e-visa facilities for their citizens. In 2016, neighboring Armenia and Georgia lifted visa requirements for Iranians, leading to the overall flight increases between the two countries and the addition of Tehran-Tbilisi flights to Iran Air’s schedule.

Although Iran Air does not publish passenger statistics and load factors on its routes, its performance can be estimated based on frequency increases on many of its European routes in the last year. Flights to Frankfurt, Gothenburg, Stockholm, and Vienna have all seen the addition of more weekly flights and higher capacities. The Tehran-Belgrade flights, have already sold out through the summer of this year. The airline has also begun codeshare flights on Lufthansa’s Tehran flights, and expanded its codeshare services with Turkish Airlines.

Iran Air's network has grown significantly since 2015, but remains much smaller than that of a decade ago. In 2002, the airline was serving 18 European destinations, compared to 13 destinations today. Iran Air’s Asian flights to Beijing, Bangkok, Kuala Lumpur, Seoul, and Tokyo, have not been in operation for a several years.

By re-establishing these routes, Iran Air could capitalize on a hub and spoke system used by most global airlines. Better geographically positioned in the Middle East than any other Persian Gulf carrier, Tehran could serve as a connecting point for passengers traveling to East Asia and Australia from Europe and North America.

With neighboring Qatar Airways, Emirates, and Etihad Airways experiencing financial difficulties due to political tensions, increased competition, and investments in struggling European airlines, now would be an ideal time for Iran Air to revitalize its own hub and spoke strategy in order to grab market share. 

However, despite the opening of new routes planned for this year, Iran Air faces an uphill battle in sustaining its growth. Because the airline's network remains limited, the success of newly launched routes is initially dependent on Iranian tourists. Economic pressures could see Iranian tourist figures fall. The Iranian departure tax may rise later this year and current proposals show increases from USD 15 to USD 45, which must be paid by all passengers departing Iran.

Furthermore, due to the existing sanctions on financial transactions, Iran Air tickets are not sold on various travel websites. Tickets are sold only through Iran Air offices or travel agents, making it difficult for those booking online from outside of Iran. This hinders growth for connecting passengers and makes competing airlines more attractive, which have already increased their Iran services. In the last two years alone, Iran Air has faced new competition from Air France, Austrian Airlines, British Airways, and KLM, all of which have resumed services or increased the number of seats on Iranian flights. 

Nonetheless, Iran Air has revitalized its domestic flights with the creation of a new regional service using newly acquired ATR aircraft. Iran Air is projecting a significant rise in revenue. At the height of economic pressure in 2013, the company’s revenue was approximately USD 330 million. The airline hopes to earn around USD 1 billion annually once its new fleet has been put into service over the next decade. Plans to begin flights to many intercontinental destinations depend on the arrival of new long-haul aircraft. 

The airline currently has fifteen Boeing 777-300ERs on order, most of which will be used for intercontinental flights. During a press conference in Paris, the airline’s CEO, Farzaneh Sharafbafi, confirmed that upon receipt of the Boeing aircraft, Iran Air would start or resume flights to Adelaide, Bangkok, Kuala Lumpur, and Sydney, further expanding its reach into Asia and Australia. On these planned routes, Iran Air faces little to no competition from Asian carriers. 

Sharafbafi reassured all that Boeing would remain committed to its landmark contract. She also said that there are no problems in financing the orders and that Boeing and Airbus jets would be delivered in late 2018 and 2019 respectively.

But while the licenses issued by the U.S. government allowing for the sale of Airbus, Boeing, or ATR aircraft remain valid, the Trump administration continues to threaten to pull out of the Iran nuclear deal. Ultimately, the growth of Iran Air significantly depends on American adherence to the deal and the delivery of the new aircraft. It remains to be seen whether Sharafbafi will have the opportunity to pursue Iran Air's ambitious reintegration in the global airline industry.

Photo Credit: Alireza Izadi