In order to update an ailing fleet of planes the Middle Eastern country will buy new European planes...
Iran has turned to Airbus to modernise its national airline in a $500m deal to buy 10 new passenger planes. It seems that the engine orders will mostly likely to be awarded to the Rolls Royce company.
Two recent crashes have raised safety concerns about Iran Air and its ageing fleet of mainly Boeing jets that were bought before the 1979 Islamic Revolution.
The US trade sanctions also barr the sale of aircraft or parts to Iran, which President George Bush describes as being part of an "axis of evil", if more than 10% originates from the US.
On Saturday, the Aftab-e Yazd newspaper quoted Transport Minister Ahmad Khorram as saying a deal to buy 10 Airbus planes had been ?finalized? and that the purchase of another 20 used planes was also being negotiated.
?In this way, 13 aircraft will join Iran's aviation fleet in the next Iranian year, starting 21 March, under the term of ultimate ownership? Mr Khorram said.
The deal will be welcomed by Airbus which has lost orders for over 90 planes, more than a quarter of its order book, after many airlines cut back on investment following the 11th of September.
While the plane orders will be placed with Airbus, airlines usually buy engines under separate deals. The US firms Pratt & Whitney and General Electric build engines for Airbus aircraft but would be barred from selling them to Iran because of the economic embargo. Britain's Rolls-Royce is the only other engine maker for Airbus.
No details of what type of aircraft would be ordered were given and Airbus and Rolls Royce declined to comment. Iran Air already flies seven Airbus A300s, which seat around 260 passengers, the last two of which were added to the fleet in 1994.
The Iranian government has been under pressure to modernise its commercial fleet after two leased planes crashed in the past 12 months killing some 160 people. The latest crash on 12th February of a Tupolev-154 killed all 119 people on board.
Iran Air Tours, a subsidiary of Iran Air, announced on Wednesday it had grounded Russian-built planes on 16 domestic routes. Iranian carriers use 13 aging Russian-built planes, including at least eight which belong to Iran Air Tours.