Air transportation in one of the key components of today’s world transportation system and has a major role in today’s modern economic activities in both regional and international transactions. Undoubtedly, air transportation facilitates the fast movement of persons, materials, trades and commerce. It has been one the key job creating areas comprising employment in operations and management, aircraft maintenance, storage facilities, charter services and leasing activities.

According to the latest statistics the aviation industry supports 58 million jobs around the world both directly and indirectly.

Job created by aviation industry- millions of job

Air transportation1

Tourism is particularly important in many developing countries, where it is a key part of economic development strategies. More than 50% of international tourists are traveling by air and aviation plays a crucial role in tourism industry. Aviation also supports $2.4 trillion of the world’s gross domestic product (GDP).

 

Air transport contribution to global GDP  USD bnAir transportation2

 

Consequently, compared to the other ways of transportation, air transportation is fast and reliable over long distances. This fact is made most apparent when you consider that around a 30% of all international trade is sent by air in value of goods sent.

As Iran is getting ready for the post sanctions era, the country has been a lucrative destination for investment. Other than the vital sectors of the country, the aviation industry was hurt by long-standing sanctions.

Iran’s new deal with the world represents a chance to renew a fleet whose average age of 23 years is almost twice the international average.

Need for renewing of Iran’s fleet, with an age of more than 20 years is attracting for international manufacturers involved. According to Civil Aviation Organization it is estimated that Iran, a country of 80 million people, would need around 500 new aircraft in the next decade to renew its old fleet. According to officials, Iran is planning to finance the purchases through mechanisms such as leasing, foreign loans and state funds. Iran is ranked as one of the oldest known air fleet in the Middle East.

Iran has more than 20 million domestic passengers a year and 6 million international passengers on Iranian carriers. Despite sanctions it had a 6% growth and it is expected to have an increase about 10% for 10 years. Some analysts expect Iran to acquire as many as 300 new commercial jet aircraft, with an estimated value of around $18 billion over the next decade. Such an overhaul would bring Iran’s fleet closer to international standards.

Finally, in case Iran replaces its older aircraft with newer ones, they would benefit from reduced operating costs from both fuel and maintenance perspective. This will drive increased operational efficiencies.