Iranian Government Removes Iran Air From Sale

Iranian flag carrier Iran Air will remain under the state’s control as the government has canceled its plans to divest itself of the airline. This decision was announced earlier this week, with the Transportation Ministry citing concerns that the company could face financial challenges moving forward.

Iranian Government Removes Iran Air From Sale
Iran Air has a fleet of 39 aircraft with an average age of almost 19 years. Photo: Getty Images

Full government divestment canceled

According to PressTV.com, Iran’s Transportation Minister Mohammad Eslami made the announcement on March 31st, which will see the removal of Iran Air from a list of state-run companies available for sale to private owners. The airline’s precarious financial situation was cited as the reason for the move. “Iran Air is among our national assets … after gaining the approval of the government, we took it out of the privatization list,” Eslami said.

The minister explained that the cancelation was the outcome of government-level discussions regarding the potential risks of such a divestment. CH-Aviation notes that this includes the risk of insolvency that could take place a number of years after any shift to private ownership.

“This company was available for privatization for several years. However, the situation was not ripe for such divestment because what was taking pace in practice could have harmed the IranAir,” -Mohammad Eslami, Transportation Minister of Iran via PressTV

Iranian Government Removes Iran Air From Sale
Iran Air has two Airbus A330-200s. Delivered to the airline in 2017, the pre-owned aircraft are an average age of six and a half years old. Photo: Anna Zvereva via Wikimedia Commons 

Organizational change is still on the agenda

According to CH-Aviation, it was mentioned that the Ministry of Roads and Urban Development is planning to conduct an overhaul of the airline’s organizational structure. The goal of this overhaul is to make Iran Air “a major player in the global aviation industry.”

When questioned about the overhaul and finding increased efficiencies, the Transportation Minister responded:

“If legal, financial, and managerial structural reforms are not implemented, privatisation will destroy IranAir, so the government agreed that it leave the privatisation list, and we’ve taken the opportunity to make these changes.” -Mohammad Eslami, Transportation Minister via CH-Aviation

Iranian Government Removes Iran Air From Sale
With an average aircraft-type age of 26 years, IranAir has some of the oldest active Airbus A320s in the world. Its oldest A320 is 29 years of age. Photo: Aeroprints.com via Wikimedia Commons 

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Shifts in ownership around the world

While Iran Air might remain a national, government-controlled airline, 2020 saw a number of airlines flirt with the idea of government ownership.

The airline industry is a broad mix of ownership models – ranging from public ownership via the stock market, to being fully private companies. Of course, many carriers around the world are either partially or fully supported by the government with higher-profile examples including carriers in the Middle East and Ethiopian Airlines.

Do you think the Iranian government made the right move in calling off the sale? Let us know your thoughts in the comments.

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