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Sun 7 Feb 2016 03:00 PM

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Dubai Aerospace sees 30-35 aircraft deals in 2016, mostly from Iran

Iran agreed with European manufacturers last month to purchase up to 158 aircraft but these could take a few years to be delivered

Dubai Aerospace sees 30-35 aircraft deals in 2016, mostly from Iran

Dubai Aerospace Enterprise (DAE), one of the few Gulf aircraft leasing firms, expects to add 30-35 planes to its current portfolio of 97 with significant demand seen coming from Iran, the company's chief executive said on Sunday.

Iran, which has emerged from years of sanctions that prevented it from legitimately buying aircraft, agreed with European manufacturers last month to purchase up to 158 aircraft but these could take a few years to be delivered.

Iranian airlines will be looking to lease aircraft that are immediately available while they await the European deliveries, DAE chief executive Firoz Tarapore said in an interview.

"We hope to book another 30-35 aircraft - the demand will be across the spectrum - narrow and wide bodies, and turboprop aircraft," Tarapore said.

Shortly before delivery, airlines look for funding from banks or leasing firms to pay for their purchases. A popular structure is for airlines to sell and then lease back planes.

"I think there is an opportunity both in the near term, because lessors have the equipment ready and also when the airlines take delivery of the new aircraft and need financing or leasing solutions," Tarapore said.

DAE itself has 37 ATR 72-600s, plus 20 on option, and this is an aircraft Iran has agreed to buy from a firm co-owned by Airbus Group and Italy's Finmeccanica.

Billions of dollars of Iranian assets have been unfrozen in a nuclear-sanctions deal with world powers, but legal, financial and regulatory hurdles remain as Iran seeks foreign investor backing to overhaul its dilapidated aviation sector.

Western banks may hold off from backing aircraft and other deals until U.S. Treasury rules are clear on Iran using its financial system. Some Iranian banks have been reconnected to SWIFT, an international banking network for secure transactions, while many others remain locked.

Marian Pistik, chief executive of aviation consultancy firm Aerotask, on Thursday said Iran's legal and compliance work could take two years to meet international standards.

Its aviation laws must evolve to make the repossession process easier and it should sign up to the Cape Town Convention, an international treaty on movable property such as aircraft, for adhering to foreign court orders, said Pistik.

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