Tuesday, June 14, 2016

Iran and Boeing Dance With A Deal

A Deal has been struck with Iran that it will buy Boeing aircraft in some numbers. It will announce by weeks end what the "Deal" entitles Boeing and Iran in trade. The US federal government has oversight on every aspect of the deal as it closely is monitoring Iran's aspiration in the Mid-East region. The risk for Boeing is immense, if something were to go south with Iran's political aspirations for its region. The deal should address every aspect of the Boeing offering from Single aisle through the wide body family of aircraft.

Expect some Iranian caveats in play as it has probably thrown Boeing ancillary support and Boeing would expect some conditions are met completing the whole "Deal". I would expect Boeing throwing a sweetener into the deal pot from a bulk order point having some conditional aspirations joined within the regions risk issues. However, the measure of the deal may enlighten investors as compared with the prior Airbus purchase from last year. If Boeing exceeds Airbus in units purchased then Boeing can expect a stock market surge, where if Boeing losses ground to Airbus by unit count, investors should respond as Boeing doing a high risk venture with an adversarial country and will mute stock reaction. A generous commitment from Iran suggests its own renewal need out-ways Boeing's risk taking.

The Link to the feature Article for this topic: