More Related Content Similar to Viewoint State of the Iranian Airline Sector (20) More from 1BlueHorizon Group (15) Viewoint State of the Iranian Airline Sector1. 0© 2014 1BlueHorizon Group - www.1bluehorizon.com All rights reserved1BHG | VIEWPOINT IRANIAN AIRLINES SECTOR 13.11.2014
FINALIZEDP R O P R I E TA R Y I N F O R M AT I O N
BLUEPAPER | THE WAY WE SEE IT
STATE OF IRANIAN AIRLINE SECTOR
‘ONCE’… A WHOLE NEEDS OF 400 AIRLINERS FOR THE NEXT DECADE…
November 2014
Updated
We generate 1B l u e Horizon ® out of the Rough... www.1bluehorizon.com
FINALIZEDP R O P R I E TA R Y I N F O R M AT I O N
2. 1© 2014 1BlueHorizon Group - www.1bluehorizon.com All rights reserved1BHG | VIEWPOINT IRANIAN AIRLINES SECTOR 13.11.2014
FINALIZEDP R O P R I E TA R Y I N F O R M AT I O N
O Iranian Airline Sector has been battling sanctions since the 1990s, when the U.S. stopped Tehran
from buying civil aircraft, spare parts and post-sale services, supposedly to stop the Islamic
Republic from procuring militarily technology…
O The embargo on aircraft and parts exports to Iran has left the Iranian airlines saddled with not
only some of the oldest fleets in the Middle East, but in the world - a contributing factor to the
dreadful safety record of the country's aviation system over the past 20 years…
O While Iran has attempted to kick start its own commercial aviation manufacturing industry and
has also sourced aircraft from Russia and Ukraine, its efforts to acquire Western-made aircraft
and replacement parts have largely been frustrated, thanks to the effects of sanctions imposed by
many countries… It is notorious that the country will need at least 40 new aircraft p/a…
O The age of the aircraft and lack of spare parts has resulted in the grounding of large portions of
the country’s commercial fleet. The country’s four largest carriers – Iran Air, Iran Aseman Airlines,
Mahan Air and Meraj Airlines – all have average fleet ages above 22 years...
O Iran’s fifth 5-year National Development Plan (2010-2015) urges the government to reduce the
average age of its aircraft to 15 years by 2015…
O The Civil Aviation Organization of Iran and Iranian airlines are increasingly optimistic that the
sanctions related to the civil aviation will be lifted very soon to support required safety
improvement requiring 400 new aircraft for the next decade with an overall value around USD 18
billion - At 1BlueHorizon Group® we believe that it is time to consider carefully Iran…
FOREWORD
Cover picture: In the 1970s, Iran's airlines were the pride of the region. The national carrier Iran Air, boasted a fleet of the latest Boeings and was pursuing the purchase of Concorde jets…
3. 2© 2014 1BlueHorizon Group - www.1bluehorizon.com All rights reserved1BHG | VIEWPOINT IRANIAN AIRLINES SECTOR 13.11.2014
FINALIZEDP R O P R I E TA R Y I N F O R M AT I O N
Iran is a regional powerhouse, being strategically located between the Arab
World and the Turk countries as well as Afghanistan and Pakistan in the East
Key Facts
Official Name: Islamic Republic of Iran
Capital city: Tehran
Population: 81.8mn (2015), 17th largest country
Average household size: 5.2 pax/ household (2014)
Official language: Persian
Official currency: Iranian Rial
Government
Form of Government: Islamic Republic, unitary state
Established in 1979 by the Islamic Revolution
Head of State: Supreme Leader Ali Khamenei
Head of government: Hassan Rouhani
Geography
1.65 mn km2, 18th largest country, roughly five times larger
than Germany
Neighboring countries: Afghanistan, Armenia, Azerbaijan,
Iraq, Pakistan, Turkey, Turkmenistan
Sea cost: Persian Gulf, Caspian Sea and Gulf of Oman
Divided into 31 provinces
Key Facts Map
Source: CIA world factbook, aneki.com, BUDDEOMM (2010)
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FINALIZEDP R O P R I E TA R Y I N F O R M AT I O N
Not only has Iran a particular large population, being the 17th largest country
in the world, its population is also particularly young with a median age of
28.8 years
Key Facts Population Density
Population in Numbers
81,800,000 (2015) - 17th largest country
Population consists of
– 61% Persians - 16% Azeri
– 10% Kurds & the rest being Arabs, Turkmen and others
Median age: 28.8 (70% under the age of 35)
Population growth rate: 1.25% (2015e)
Population density: 44.9inhabitants/ km2
Literacy: 77%1
Academic quote: 8.3% of women and 11.3% (2006)2/
Germany: 17% (2000)
Urbanization
Urbanization: 73.4% of total population (2015)
Urbanization rate: +2.07% annual change
Big cities
1. Tehran (8.4 mn)
2. Mashhad (3.0 mn)
3. Esfahan (1.8 mn)
4. Karaj (1.8 mn)
5. Tabriz (1.6 mn)
6.Shiraz (1.6 mn)
7. Ahvaz (1.0 mn)
8. Qom (1.0 mn)
9. Kermanshah (0.8 mn)
10. Orumieh (0.6 mn)
Source: CIA World Factbook (2015), Encyclopedia Britannica (2002), BUDDECOMM (2013), Statistical Center of Iran, IAB Institute for Employment Research
1) Definition according to CIA World Factbook: Age 15 and over can read and write
2) Definition: Share of female/ male 20+year population with tertiary degree.
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FINALIZEDP R O P R I E TA R Y I N F O R M AT I O N
The economy is dominated by its hydrocarbon sector. The economic
sanctions, however, isolate the country & severely hinder it from
participating in the global economy
Key Facts GDP Growth
■ Iran is the second largest economy in the Middle East and North
Africa (MENA) region after Saudi Arabia, with an estimated Gross
Domestic Product (GDP) in 2014 of US$406.3 billion.
■ It also has the second largest population of the region after Egypt,
with an estimated 78.5 million people in 2014.
■ Characterized by a large hydrocarbon sectors, small scale private
agriculture& services and a noticeable state presence in
manufacturing & finance
■ GDP per capita (PPP): 16,165 US$ (IMF 2014)
■ Real GDP should rise to 5.8 % and 6.7 % in 2016 and 2017
■ GDP composition by sector (2014 est.): Agriculture (9.1%),
industry (40.7%) and services (50.3%)
■ Export goods: Petroleum (80 %), chemical and petrochemical
products, automobiles, fruits and nuts, carpets
■ Export partners: China (26.8%), Turkey (11%), India (10.6%),
Japan (7.3 %), South Korea (5.9 %)
■ Unemployment rate: 11.4% (2014), up from 10.4% in 2013
■ The inflation rate declined from a year-on-year peak of 45.1% in
2012 to 15.6% in June 2015 in line with the lifting of sanctions and
the tightening of monetary policy by the Central Bank of Iran.
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
24
20
16
12
8
4
0
22.5%
-0.3%
12.5%
1.0%
10.8%
0.1%
25.4%
1.0%
18.4%
7.8%
11.9%
5.8%
10.4%
4.7%
-1.1%
21.0%
Inflation (%)GDP Growth (%)
in %
Source: World Economic Outlook Database, IMF, 2014, World Bank Iran brief (2014)
1) Based on IMF World Economic Outlook Database 2014 (IFM estimates start after 2008 for GDP growth and after 2010 for inflation.
-1.9%
1.5%
23.0%
35.0%
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FINALIZEDP R O P R I E TA R Y I N F O R M AT I O N
Iran is facing severe economic sanctions from the USA as well as the
European Union, covering most sectors of Iran’s economy including the
airline industry
Trade Relations with Iran Analysis
Most severe economic sanctions are
being imposed by the USA,
maintaining an almost absolute
embargo with Iran
The European Union is maintaining
a ban on foreign trade, financial
services, energy sector,
technological goods and insurance
to Iranian firms
All Iranian financial institutions have
been excluded from international
monetary transactions through the
electronic SWIFT network
Iran’s oil industry has been worst
affected by international sanctions
followed by the energy sector and
aviation industry
Trade ties remain strongest with
ECO countries (Economic
Cooperation Organization),
particularly Turkey & Pakistan as
well as Russia & China
Countries imposing sanctions Active trade partners
Source: © 1BlueHorizon Group Analysis, The Economist, 2014; US Foreign Affairs Bureau, 2014; European Union, 2014
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FINALIZEDP R O P R I E TA R Y I N F O R M AT I O N
International sanctions continue to pose great challenges on Iranian airlines’
operations, mainly in terms of buying/leasing aircrafts as well as financing
fuel procurement
International Economic Sanctions
The United States has imposed an arms ban and an almost
total economic embargo on Iran; the sanctions also include a
ban on selling aircraft or spare parts to Iranian airlines
Though international oil companies are not prohibited from
supplying kerosene (worth up to $ 5m p.a.) to Iranian airlines,
most firms chose not to engage in any business with the
Iranian airlines
In June 2011, the United States imposed sanctions
against Iran Air, stating that Iran Air had provided material
support to the Iranian Revolutionary Guard Corps (IRGC)
In 2012 the US froze all property of the Central Bank of Iran
and other Iranian financial institutions, as well as that of the
Iranian government, within the United States
The American view is that sanctions should target Iran's
energy sector that provides about 80% of government
revenues, and try to isolate Iran from the international
financial system
Aircraft acquired must have less than 10% of US
manufactured components on board and it must not have
belonged to a US airline since its registration
As most Airbus aircraft are powered by General Electric,
CFM, Pratt and Whitney or Rolls-Royce engines, Iran Air
has not been able to acquire many of their aircraft
Current American sanctions do not prevent Iran Air from
leasing American or European aircraft either
On flights from the EU, Iran Air is forced to add fuel stops at
tier 2 airports including Istanbul, Budapest, Ljubljana or
Belgrade in order to procure jet fuel
Most of the fleet of Iranian airlines today consist of
old Boeing and used or leased Airbus as well as other
manufacturers (e.g. Fokker, Tupolev). Most used aircrafts
have been purchased through 3rd parties such as other
airlines. This has resulted in a series of disasters and
incidents: in the last 25 years there have been 17 plane
crashes, resulting in 1,500 casualties
A number of 108 aircraft have been added to the fleet of
Iranian passenger planes during the last five years
Implications for Iranian Airlines
Source: Financial Times, Spiegel, Bloomberg, © 1BlueHorizon Group Research & Analysis updated in 2014
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FINALIZEDP R O P R I E TA R Y I N F O R M AT I O N
Although Iranian airlines have survived over 20 years of international
sanctions on aircrafts and spare parts, rising fuel prices and inflation pose
high pressure on their financial viability
The Iranian oil ministry, whose revenues have dwindled after
EU oil sanctions imposed last year, has increased the price
of jet fuel by 3.5 times for domestic flights and enforced
international market rates for overseas destinations
In January 2013 the ministry refused to provide airlines with
fuel until they paid off outstanding debt amounting to $285m,
this dispute led to an unprecedented one-day halt in
domestic flights
In 2012, the government of Mahmoud Ahmadinejad allowed
the country’s 17 airlines to increase ticket fares by 65% for
domestic flights and almost double for overseas destinations.
However, this increase did not cover the rocketing fuel and
airline maintenance costs
In January 2013 the ministry refused to provide airlines with
fuel until they paid off outstanding debt amounting to $285m,
this dispute led to an unprecedented one-day halt in
domestic flights
Rising Fuel Prices
The central bank was hit by US sanctions last year and
faces difficulties in transferring hard currency into the
country
The central bank has not been able to consistently supply
airlines with US dollars at semi-subsidized rate (24,516
rials) which is higher than the official rate, but lower than
the open market rate
As a result, Iranian airlines are running up debts with
overseas airports and companies
High inflation, which is officially 28.7% but believed by
many economists to be far higher, coupled with the fall of
rial (which has dropped by about 60 per cent over the past
year) have also adversely affected passenger numbers
Aviation industry analysts fear that the financial crisis,
coupled with the existing sanctions, may further erode the
poor safety record of Iran’s airliners.
Inflation and Currency Devaluation
Source: Financial Times, Spiegel, Bloomberg, © 1BlueHorizon Group Research & Analysis updated in 2014
9. 8© 2014 1BlueHorizon Group - www.1bluehorizon.com All rights reserved1BHG | VIEWPOINT IRANIAN AIRLINES SECTOR 13.11.2014
FINALIZEDP R O P R I E TA R Y I N F O R M AT I O N
Despite the challenges, the total air travel industry in/from Iran (business &
leisure) will witness the strongest growth among all modes of
transportation with aggregate growth of 4.8% p.a.
20.5% 20.6% 20.7% 20.9%
73.2% 73.2% 73.2% 73.2%
1.9%1.9%1.8%1.7%
2014ff
4.2%4.6%
7,130
4.4% 4.0%
+12.6%
7,395 8,031
2015ff2013ff2012
7,698
AirLand Sea Rail
Domestic Travel Forecast
Domestic air travel will increase consistently until 2015,
outpacing overall growth both in the business and the
leisure segments with an absolute CAGR of 3.5% p.a. and
5.1% p.a. respectively
Proportionally, domestic air travel will also gain in
importance, representing 46.8% of all business and 49.2%
of all leisure journeys by 2015
Total Departures by Mode of Transport
Total departures originating in Iran will grow by 12.6% until
2015:
- Air traffic thereof will grow proportionally to represent
~21% of all departures (+4.8% p.a.)
- Particularly sea transportation will witness declining
demand, dropping to merely 4% of all departures
‘000 trips ‘000 trips
2012
+2.9% p.a.
11.4%
46.8%
43.0%
542
41.8%
2015ff
591
46.1%
11.0%
LandAir Rail
49.2%
11.1%
+3.9% p.a.
41.8%
6,916
39.8%
10.8%
47.4%
7,735
2012 2015ff
LeisureBusiness
Source: Euromonitor Iran Travel Industry 2014, © 1BlueHorizon Group Analysis
10. 9© 2014 1BlueHorizon Group - www.1bluehorizon.com All rights reserved1BHG | VIEWPOINT IRANIAN AIRLINES SECTOR 13.11.2014
FINALIZEDP R O P R I E TA R Y I N F O R M AT I O N
By 2015, Turkey will become Iran’s most popular destination with growth of
8.2% p.a. (2010-2015); airlines will face tremendous potential to expand their
route networks accordingly
Departures/Arrivals from Iran (top 6 destinations)
568
613
656
444
473
525
517
602
8,000
6,000
4,000
2,000
0
9,000
1,000
7,000
5,000
3,000
2,990
2,288
8,031
2015ff2012
7,130
2,856
413
423
1,794
+4%
‘000 trips Aggregate demand for travel from Iran (departures) will
increase at a solid CAGR of 4% p.a. until 2015
Turkey represents the most favored destination from Iran,
with the total number of trips increasing by 8.2% p.a. over
the same period of time
– By 2015, 28.5% of all departures from Iran will be
destined for Turkey
By 2015, Saudi Arabia will represent the largest arrival
origin and the 3rd largest departure destination from Iran
– Though Saudi Arabia benefits tremendously from
pilgrimage tourism during the Hajj, it merely contributes
to 7.6% of all trips originating in Iran
By 2015, 37.2% of all departures as well as 41.8% of all
arrivals will be from/to non-top 6 countries
The forecast indicates tremendous potential for airlines to
extend their existing route networks to cover the identified
growth destinations
Industry Outlook
Others
India
China
Qatar
Saudi Arabia
United Arab Emirates
Turkey
858 933
187
161
174
168
215
180
225
191
208
206
293
275
3,000
2,500
1,000
0
2,000
500
1,500
2,038
2,233
2015ff2012
+3%
Departures Arrivals
Japan
Pakistan
Kuwait
Syria
Source: Euromonitor Iran Travel Industry 2014, © 1BlueHorizon Group Analysis
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FINALIZEDP R O P R I E TA R Y I N F O R M AT I O N
On a global level, the airline industry is subject to volatile fuel prices, high
interest rates, decreasing consumer spending and tightening regulations
Energy Prices: Fluctuation in crude oil and
related energy prices
Interest Rates: Change in prime and related
interest rates
Consumer Spending: Change in overall level of
consumer spending on goods and services
Technology Innovation: Advances in science
and technology, including information technology
Government Regulations: Changes in
government regulations or business policies
Airline Industry Main Drivers Critical Issues and Challenges
Profitability depends on business/ consumer travel:
Global aviation traffic rises and falls at twice the pace of
economic output, so a change in the economy doubles the
impact for airlines. Because of relatively high fixed-costs of
airplanes, airport facilities, and labor, airlines cannot easily
adjust to reduced passenger traffic
Fuel costs may vary tremendously – Jet fuel accounts for
20-30%of industry operating costs, relatively more for
airlines with low labor costs. Fuel costs can change rapidly,
making it difficult for airlines to adjust ticket prices
Capital-intensive industry - Airplanes are expensive to
acquire and maintain. Most new airplanes typically cost
between $50 and $250 million. Newer planes are usually
more fuel-efficient, but the high prices deter many airlines
from buying them
Airlines depend on skilled employees - Airlines cannot fly
without certified pilots and mechanics, whose training takes
years. The unions that represent these employees at most
airlines have an exceptionally important voice in labor
issues
Source: © 1BlueHorizon Group Analysis, Market Research Airline Forecast 2014
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FINALIZEDP R O P R I E TA R Y I N F O R M AT I O N
In the meantime, legacy carriers from around the world continue to face
harsh profitability challenges with operational KPIs differing tremendously
across the industry
Airline
Total
Desti-
nations
Fleet
Size
Seat
Load
Factor
# of
Employ-
ees
Net Profit
Margin
65 52 - 7,500 -
122 169 80% 33,634 2.4%
124 119 - 15,032 -
82 64 75.8% 9,038 0.03%
49 35 70% 3,876 -
42 30 73% 5,375 -38%
59 32 69.8% 4,545 -7.5%
43 60 72% 11,044 -4.8%
62 161 73.5% 29,852 -2%
185
184
141
179
199
111
142
126
Legacy carriers around the world are facing similar operational
challenges towards profit margins and other relevant KPIs
When considering employee-to-aircraft ratios, airlines such as Gulf
Air (111 employees per aircraft) or Qatar Airways (126 employees
per aircraft) illustrate best-in-class performance
Iran Air illustrates a ratio of 144 employees per aircraft, a favorable
ratio compared to local and global competitors
144
Employee/Aircraft Ratio for
Selected Legacy Carriers
Facts & Figures
of Selected Legacy Carriers
Source: © 1BlueHorizon Group Analysis, Arab Air Carriers Organization, 2014, Company Websites, Last published annual report, 2014
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FINALIZEDP R O P R I E TA R Y I N F O R M AT I O N
Jet fuel accounts for approx. 30% of airlines’ operating
expenses
Airlines have tried to pass on fuel price increases to
consumers, but unless all airlines do this simultaneously,
those that did it were at a competitive disadvantage
To minimize the impact of fuel price increases, airlines may
cancel low-capacity routes, consolidate routes, and use one-
engine taxiing at airports.
Proactively, most airlines engage in financial hedging to
protect against fuel cost increases, and may buy newer
planes and engines that are more fuel-efficient for a
particular type of service.
Fuel consumption of aircraft varies widely: an Airbus 319
that carries 122 may burn 758 gallons of fuel per hour, while
a Boeing 747-400 that carries 369 may burn 3,500 gallons
per hour. Because of high fuel costs, newer planes and
engines have been designed to be as efficient as possible
for a particular type of service
However growth is ahead, with strong and complex cross winds existing…
the jet fuel at low level of USD 66/bbl by the end of 2014 relieves airlines from
increasing cost pressures
Fuel Cost Jet Fuel Prices
Source: BMI Freight Transport Report 2014, © 1BlueHorizon Group Analysis
A key contributor is Jet fuel prices which stood at $66/bbl, a
reduction of 47% on Jan-14 and will thus relieve airlines
from increasing cost pressures
In 2015 the fuel bill is estimated at $192 billion; 26.1% of
operating expenses lower than previous years.
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FINALIZEDP R O P R I E TA R Y I N F O R M AT I O N
Note: RPK stands for Revenue Passenger Kilometers
Source: © 1BlueHorizon Group Analysis, Airbus Global Market Outlook 2014 (2014 – 2034)
RPK traffic growth from/to Middle East by Region
One of the Key parameters when
analyzing the region’s air
transport is its people’s propensity
to travel. There are several
factors which directly affect this,
including:
• Economic stability and an
expanding middle class
• Growing and significant urban
population
• Strong and/or growing
competition
• High levels of immigration
• Lack of extensive train networks
in the region
• And geographical features (large
distance between population
centers and the presence of
large bodies of water or
continental mountains)
Propensity to travel
5.9%
6.8%
Africa
6.4%
North America
4.7%
Europe
7.6%
CIS
6.7%
Asia-Pacific
Middle East
Latin America
Despite sign of saturation on the Intra Middle East traffic due to condensed
competition, the Middle Eastern carriers will grow from an 8% share to 13% of
traffic in the next 20 year…
There remains significant untapped potential for liberalization within the region: The Kingdom of Saudi
Arabia is taking steps toward opening its underserved domestic markets, and without any doubt as soon
as the sanctions will be lifted Iran will follow…
Strategically located, the Middle East is predestined as a global 1-stop hub
connecting established Western with Eastern growth-markets with 2/3 of the
world’s population within eight flying hours
7.4%
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FINALIZEDP R O P R I E TA R Y I N F O R M AT I O N
Particularly, the Arabian sea has witnessed the emergence of several fast-
growing carriers leading to increased competition also for the Iranian
domestic market
Airline
Total
Desti-
nations*
Middle
East
Europe /
Americas
Asia /
Africa
Home
65 35 21 / - 9 / - Tehran
55 37 6 / - 11 / 1 Tehran
54 54 - -
Tehran,
Shiraz
122 17 32 / 11 38 / 22 Dubai
124 25 30 / 7 43 / 19 Doha
82 16 16 / 5 37 / 8 Abu Dhabi
90 40 15 / 2 19 / 14
Jeddah,
Riyadh,
Dammam
62 28 15 / - 14 / 5 Dubai
82 26 21 / - 20 / 11 Sharjah
* Individual routes may not add up to total number of destinations due to seasonality
Home Base of Selected Airlines in the Persian Gulf Scheduled Network – Number of Destinations
Source: © 1BlueHorizon Group Analysis, Airline Websites – Last published annual report 2014
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FINALIZEDP R O P R I E TA R Y I N F O R M AT I O N
Independently of the Low Cost Carrier, different business models have
emerged: in the Middle East only 21% of the aircraft are for Short Haul, in
Europe 71% - means 3.4 times bigger...
Long Haul
79%
Short Haul
21% Long Haul
29%
Short Haul
71%
Middle East
(313 Aircraft)
Europe
(1.523 Aircraft)
Mix fleet 2013
Source: © 1BlueHorizon Group Research, Long Haul: All aircraft type> A320/B737 without B737ER, 2013 based on companies reports
The Middle-East Big 3 (MEB3) The European Big 3 (EB3)
Middle East is the only region in the world where the wide-body fleet is larger than
the single-aisle fleet...
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FINALIZEDP R O P R I E TA R Y I N F O R M AT I O N
The Long Haul fleet key advantage to link continents
... or the Middle-East Big Three ‘MEB3’ carriers have 3 times the ordered
seat, in the next 10 years compared to the European Big 3 ‘EB3’ and the
trend is growing
19,131
48,475
169,469
+188%
92,294
28,700
58,786
30,527
9,128
Source: © 1BlueHorizon Group Analysis, Ascend, www.anna.aero (without the last Dubai Air Show orders….)
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FINALIZEDP R O P R I E TA R Y I N F O R M AT I O N
Foreign airlines maintain strong flight frequencies/seat capacities to Iran;
Turkish Airlines offers 94 flights per week whereas Emirates accumulates a
weekly seat capacity of ~16,418
Destination Map Iran
Foreign & Domestic Airlines
Air Traffic to/from Iran by Foreign Airlines
Foreign airlines Domestic airlines
Routes to/from Iran by foreign & domestic airlines
Based on the frequency of flights and the respective aircraft
type used, the top 3 foreign airlines have available weekly
seat capacity as follows:
- Turkish Airlines*: ~12,972 available seats per week
- Qatar Airways*: ~7,488 available seats per week
- Emirates*: ~16,418 available seats per week
Emirates thus illustrates the largest seat capacity out of all
foreign airlines serving Iran
Top 3 Foreign
Airlines
# of Flights
per Week
to/from Iran
Destinations in Iran
Aircraft Type
Used
94
Tehran; Shiraz;
Esfahan; Mashad;
Kermanshah;
Tabriz
A319/320
B737
52
Tehran; Shiraz;
Mashad
A320
45 Tehran
B777-300
A330-200
* A319= 126 pax; A320= 143 pax; B737= 143 pax | A320= 144 pax
B777-300= 386 pax; A330-200= 250 pax
Source: © 1BlueHorizon Group Analysis, Airline Websites – Last published annual report 2014
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FINALIZEDP R O P R I E TA R Y I N F O R M AT I O N
The Iranian airline Industry is also illustrating solid growth at 3.4% annually,
driven by inbound and outbound flights from the Middle East and Asia
Air Departures and Arrivals to Iran
1,352 1,400 1,459 1,523 1,594 1,680
666
688
711
735
761
788
0
200
400
600
800
1,000
1,200
1,400
1,600
1,800
2,000
2,200
2,400
2,600
2,800
2015ff
2,258
2013ff
2,355
2014ff
2,468+4%
2,019
2,088
2,170
20112010 2012
‘000 trips
Arrivals Departures
Inbound travel will grow at a 3.4% CAGR to reach 0.78
million trips in 2015
Outbound travel will grow at a 4.4% CAGR to reach 1.68
million air trips in 2015
The total number of flights is expected to reach 2.5 million
inbound and outbound flights by 2015
This positive growth trend will be dominated by growth in
arrivals from the Middle East and Asia, offsetting a
continued negative growth in arrivals from Europe and the
US
The decline in arrivals from European countries will average
a negative 1-2% during the forecast period, with a negative
2% CAGR for arrivals from Germany, Spain and from
France
Strained relationships with South Korea will also see
arrivals from this market decline at a much faster CAGR of -
4% during the coming years
Industry Outlook
Source: Euromonitor Iran Travel Industry 2014, © 1BlueHorizon Group Analysis
20. 19© 2014 1BlueHorizon Group - www.1bluehorizon.com All rights reserved1BHG | VIEWPOINT IRANIAN AIRLINES SECTOR 13.11.2014
FINALIZEDP R O P R I E TA R Y I N F O R M AT I O N
The air travel market in Iran is set to reach a value of IRR 18.6 billion by
2015 despite growing concerns regarding aircrafts safety
Air transportation industry is set to increase by 4% annually
to reach by 2015 a value of IRR18.6 billion
Domestic tourism sees the most activity, although it does
not generate as much sales value, 3.8 million domestic trips
will be taken by air in 2015, a 31% increase from 2010
The leading national carrier is Iran Air followed by Iran
Aseman Airlines. Mahan Air and Kish Air also service an
extensive network of domestic routes and also some
intraregional routes. Domestic services by all airlines are
frequent, reliable and time efficient for anyone travelling
within the country
However, planes are beyond their typical life expectancy,
especially those used on local routes and maintenance and
safety are significantly below Western standards, making air
travel within Iran a safety concern
According to the Iranian Civil Aviation Organization (IR-
CAO), there were five accidents in Iran within 12 months
extending from March 2009 to March 2010. A total of 186
civilians were killed in these accidents
Industry OutlookAir Travel Value
2010 2011 2012 2013 2014 2015
19,0
18,5
18,0
17,5
17,0
16,5
16,0
15,5
15,0
14,5
14,0
18,6
17,7
17,0
16,3
15,6
15,1
IRR billion
Source: Euromonitor Iran Travel Industry 2014, © 1BlueHorizon Group Analysis
21. 20© 2014 1BlueHorizon Group - www.1bluehorizon.com All rights reserved1BHG | VIEWPOINT IRANIAN AIRLINES SECTOR 13.11.2014
FINALIZEDP R O P R I E TA R Y I N F O R M AT I O N
Air travel in Iran is split predominantly between Iran’s three largest players
(Iran Air, Iran Aseman, Mahan Air with Meraj Airlines emerging) and a small
presence of major international airlines
Iran Air Iran Aseman Airlines
Mahan Airlines International Airlines
2
4
The company commends a 13% market value share of international
flights and an 8% share of domestic flights
There have been many security concerns plaguing Mahan Air’s brand
image, although all other airlines have also had accidents and security
issues
Mahan Air still lags behind in this context as it was also banned from
flying to and from the EU in 2007. The U.S. has imposed sanctions on
Mahan Air three times since 2011 for allegedly shipping arms to the
Syrian government; ferrying members of the Islamic Revolutionary Guard
Corps; and providing transport for the Lebanese militia Hezbollah.
3
1
Iran Aseman Airlines was created in 1980 and now operates scheduled
domestic and regional flights in the Persian Gulf, as well as charter air
services
The company was owned by Iranian Civil Pension Fund Investment and was
privatized in 2008. It is based at Mehrabad International Airport for domestic
flights and Imam Khomeini International Airport in Tehran for international
flights
It has a base in Shiraz International Airport (SYZ) and Mashhad International
Airport in addition to the Dubai International Airport
Iran Air is the country’s flag-carrier and operates services to 60 destinations,
including 35 international and 25 domestic destinations
It is based at the Tehran Imam Khomeini International Airport (IKA) for
international flights and Tehran’s Mehrabad International Airport (THR) for
domestic flights
The company also operates a low cost carrier, Iran Air Tours, which
operates from the Mashhad International Airport (MHD)
The airline services domestic cities: Mashhad, Zahedan and Ahvaz.
The airline started operating in 1990, and is the main carrier for
Iran Air’s domestic flights. The airline also operates charter flights
Key international destinations serviced by the airline include
Dubai and Abu Dhabi, Bahrain, Kuwait and Qatar and another 20
or domestic destinations. The company had a fleet of 36 aircraft
as of November 2014
Low cost airlines including Air Arabia, AtlasJet and Jazeera Airways have
also entered this market with some success
Air Arabia’s launch in Iran has contributed to increased traffic between the
United Arab Emirates and Iran. Iranians travel a lot to the United Arab
Emirates, especially to Dubai, although it is generally the more wealthy
Iranians who go to Dubai and who would hence be less worried about cost
A number of international airlines also fly to Iran from
several regional and intercontinental destinations, including
the regional leaders: Emirates Airlines, Qatar Airways,
Turkish Airlines as well as Saudia, which holds the largest
market share of Saudi tourists travelling to Iran
Mahan Air is a private airline operating scheduled domestic flights
and international flights to 61 destinations in 12 countries
*Market share by total number of flights to/from Iran
Iran Air
55%
Others
45%
Market share*
Source: Euromonitor Iran Travel Industry 2014, © 1BlueHorizon Group Research & Analysis
22. 21© 2014 1BlueHorizon Group - www.1bluehorizon.com All rights reserved1BHG | VIEWPOINT IRANIAN AIRLINES SECTOR 13.11.2014
FINALIZEDP R O P R I E TA R Y I N F O R M AT I O N
As Iran’s flag carrier, Iran Air was established in 1962 and operates three
subsidiaries, operating services to 80 destinations.
Overview
Tehran
In spite of the restrictions due to sanctions, Iran Air has
managed to continuously expand its operations and
operates three subsidiaries – Iran Air Tours, Homa Tourism
Center, and Homa Hotel Group
Iran Air Tours functions as an independent airline entity,
nonetheless it is still considered to be a complementary
organization for the activities of Iran Air
Homa Tourism Center covers incoming, outgoing and
domestic tours, while Homa Hotel Group consists of five 5-
star hotels in Tehran, Mashad, Shiraz, and Bandar Abbas.
Subsidiaries
Iran Air is facing challenges in terms of fuel efficiency due to
the outdated fleet in use
The fleet can’t be overhauled due to tightening international
sanctions on the country
Customer loyalty and trust in the Airline is degrading due to
the increasing number of safety incidents
Future Outlook
Fact Sheet
Iran Air was established in 1962, as a result of a merger
between Pars Airways and Iranian Airways
Iran Air covers 35 destinations in the Middle East and 30
destinations outside the region
Frequent-flyer program: SkyGift
Since 1994, 10 Airbus planes and One Fokker have been
added to the fleet that consists of 51 airplanes
Revenue: USD 850 million (2012)
Source: Euromonitor Iran Travel Industry 2014, © 1BlueHorizon Group Analysis
23. 22© 2014 1BlueHorizon Group - www.1bluehorizon.com All rights reserved1BHG | VIEWPOINT IRANIAN AIRLINES SECTOR 13.11.2014
FINALIZEDP R O P R I E TA R Y I N F O R M AT I O N
Iran Air’s current route network bears tremendous potential for expansion
particularly to its key economic partners within ECO (incl. Pakistan) and China
Iran Air Route Network – International & Domestic
With over 30 domestic and regional destinations, Iran Air has a solid coverage
particularly on its domestic routes
However, it is facing strong competition from Middle Eastern carriers such as
Turkish Airlines, Qatar Airways and Emirates who maintain high flight frequencies
and large seat capacities to/from Iran
Iran Air is the sole carrier offering routes to/from Lebanon (incl. Mahan Air)
Serving over 20 destinations across Europe, Iran Air illustrates a developed
route network, though these routes are subject to volatility due to the imposed
sanctions by the European Union
As of today there are no routes connecting North Africa
Iran Air is also the sole carrier on routes to/from the UK, France, Denmark and
Sweden
With just over 10 destinations across Asia, Iran Air still possesses tremendous
potential to tap into the continent on a larger scale
Iran Air remains the sole carrier to its economic partners Pakistan and China
as well as to India, Thailand and Malaysia (incl. Mahan Air)
As trade is expected to increase with Iran’s key economic partners within ECO
as well as China, air travel growth to these countries is to be expected
Middle East
Europe
Asia
Source: Iran Air website, 2014
24. 23© 2014 1BlueHorizon Group - www.1bluehorizon.com All rights reserved1BHG | VIEWPOINT IRANIAN AIRLINES SECTOR 13.11.2014
FINALIZEDP R O P R I E TA R Y I N F O R M AT I O N
At the end 2014, Iran Air fleet has plane averaging 27.1 years in age, which is
almost twice the international average
Source: © 1BlueHorizon Group | Case Material
A modernization program needs to be implemented swiftly to avoid dramatically
safety issues… Iran Air needs to purchase at least 100 wide-body and short-haul
jets in the future…
Aircraft Total Orders
Passengers
Year of
entry
Comment Potential
J Y Total
Airbus A300B4-200 8 0 30 248 278 1980
Airbus A300-600R 4 0 30 248 278 1994
Potential conversion to
freighter (P2F program)
Airbus A310-300 2 0 0 200 200 2001
Potential conversion to
freighter (P2F program)
Airbus A320-200 5 0 12 144 156 2009
Boeing B747-200BM 3 0 22 427 449 1978
Boeing B747SP 1 0 22 283 305 1978 Maintenance in China (?)
Fokker 100 16 0 0 104 104 1991
McDonnell Douglas MD-82 1 0 12 133 145 2013 Leased
Tupolev Tu-204 - 35 TBA TBA Deal announced in 2007(!)
Iran Air Cargo Fleet
Airbus A300B4-200F 2 0 1978
Boeing B747-200F 1 0 1980
Boeing B747-200C 1 0 2008
Total 44 35
25. 24© 2014 1BlueHorizon Group - www.1bluehorizon.com All rights reserved1BHG | VIEWPOINT IRANIAN AIRLINES SECTOR 13.11.2014
FINALIZEDP R O P R I E TA R Y I N F O R M AT I O N
Mahan Airlines established in 1991 is Iran’s first private airline and today the
largest airline based on seat numbers and fleet size (average 23.6 years)
Overview
Tehran
Fact Sheet
The airline carried 5.6 million passengers in 2014 with an average
load factor of 77% and in mid-2015 had a fleet of 65 aircraft, making
it the largest airline in Iran based on seat numbers and fleet size;
The U.S. has imposed sanctions on Mahan Air three times since
2011 for allegedly shipping arms to the Syrian government; ferrying
members of the Islamic Revolutionary Guard Corps; and providing
transport for the Lebanese militia Hezbollah;
Mahan Air serves over 61 destinations.
Source: Euromonitor Iran Travel Industry 2014, © 1BlueHorizon Group Analysis
Aircraft Total Orders
Passengers
Year of
entry
Comment Potential
J Y Total
Airbus A300B4-200 2 0 16 231 249 Phasing out by 2015
Airbus A300-600R 14 0 21 28 246
Airbus A310-300 11 0 23 157 180
Airbus A321-200 1 0 --- --- ---
Airbus A340-300 4 0 --- --- ---
Airbus A340-600 7 0 55 160 215
Avro RJ85 / RJ100 6 0 8 104 112
Bae 146 10 0 0 90 90 1 -200 series / 9 -300 series
Boeing B747-300 Combi 2 0 24 432 456
TOTAL 57 0
26. 25© 2014 1BlueHorizon Group - www.1bluehorizon.com All rights reserved1BHG | VIEWPOINT IRANIAN AIRLINES SECTOR 13.11.2014
FINALIZEDP R O P R I E TA R Y I N F O R M AT I O N
Iran Aseman Airlines historic links go back to 1958 to the airline Air Taxi Co.,
which became Pars Air in the 1970s and later Iran Aseman Airlines
Overview
Tehran
Fact Sheet
The airline was established and started operations in 1980;
Aseman was the first aviation company in the Middle East to
provide Air Ambulance services;
The airline is owned by Iranian Civil Pension Fund Investment
Company;
Iran Aseman Airlines serves over 54 destinations.
Iran Air fleet has plane averaging 23.4 years in age
Source: Euromonitor Iran Travel Industry 2014, © 1BlueHorizon Group Analysis
Aircraft Total Orders
Passengers
Year of
entry
Comment Potential
J Y Total
Airbus A320-200 3 0 --- --- 180
Airbus A340-300 1 0 --- --- 300
ATR 72-200 4 0 --- --- 70
ATR 72-500 2 0 --- --- 70
Boeing B727-200 3 0 --- --- 175 2 are B727-200F
Boeing B737-400 2 0 --- --- 150
Fokker 100 20 0 --- --- 109
Dassault Falcon 20 1 0 --- --- --- Air Ambulance
TOTAL 36 0
27. 26© 2014 1BlueHorizon Group - www.1bluehorizon.com All rights reserved1BHG | VIEWPOINT IRANIAN AIRLINES SECTOR 13.11.2014
FINALIZEDP R O P R I E TA R Y I N F O R M AT I O N
Mahan Air outperforms Iran Air and Iran Aseman Airlines across major
operational KPIs; all of Iran Air and Iran Aseman Airlines’s top 20 routes
illustrate major delays and partially high flight cancellation rates
Iranian Airlines - Operational Performance Top 20 Routes
Iran Air’s operational performance on its 20 most active routes indicates
delays on every single of its routes
Average flight cancellations on its top 20 routes are comparatively high,
particularly due to a cluster of routes with high cancellations e.g. RAS-THR
Though Iran Air outperforms Aseman across all KPIs, its performance is still
significantly lower when compared with Mahan Air
96
52
46
3735
2927
21201815
121099
0
10
20
30
40
50
60
70
80
90
100
0
10
20
30
40
50
60
70
80
MHD
- THR
BND -
THR
65
OMH
- THR
RAS-
THR
IKA -
KUL
AWZ
- THR
TBZ -
THR
30
IKA -
BOM
BUZ -
THR
ZAH -
THR
IKA -
FRA
IKA -
DXB
ADU -
THR
16
KSH -
THR
XBJ -
THR
AZD -
THR
10
SYZ -
THR
IKA -
IST
IFN -
THR
Cancelled Flights (%) On-Time Performance (%) Average Delay (minutes)Minutes %
Average
Cancelled Flights 17% 2% 38%
On-Time
Performance
67% 71% 35%
Average Delay 29 min. 12 min. 50 min.
Source: © 1BlueHorizon Group Analysis, FlightStats, 2014
28. 27© 2014 1BlueHorizon Group - www.1bluehorizon.com All rights reserved1BHG | VIEWPOINT IRANIAN AIRLINES SECTOR 13.11.2014
FINALIZEDP R O P R I E TA R Y I N F O R M AT I O N
Meraj Airlines established in 2010 is a Private and the first VIP airline, and
the youngest airline in Iran based on the fleet age with 21.7 years (!)
Overview
Tehran
Fact Sheet
Meraj Airlines It also operates the Air transports for the Heads of
State and Government of Iran.
Based in Tehran-Mehrabad and Tehran-IKA, the company has
established another 2 hubs as well, respectively in Mashhad and
Kish Island for better coverage of its flight network.
Meraj Airlines is known as having punctual flights and the safest
Airline in Iran and in the Middle East.
Meraj Airlines serves over 20 destinations.
Source: Euromonitor Iran Travel Industry 2014, © 1BlueHorizon Group Analysis
Aircraft Total Orders
Passengers
Year of
entry
Comment Potential
J Y Total
Airbus A300-600R 2 0 18 244 262
Airbus A320-200 4 0 12 156 168 1 in VIP configuration
Airbus A321-231 1 0 --- --- --- VIP operated for the Gov.
Airbus A340-300 1 TBA --- --- 90 VIP operated for the Gov.
Boeing B707 2 0 --- --- --- VIP operated for the Gov.
Boeing B737-4286 Adv 1 0 --- --- --- VIP
Dassault Falcon 50 2 0 --- --- --- VIP
TOTAL 13 0
29. 28© 2014 1BlueHorizon Group - www.1bluehorizon.com All rights reserved1BHG | VIEWPOINT IRANIAN AIRLINES SECTOR 13.11.2014
FINALIZEDP R O P R I E TA R Y I N F O R M AT I O N
Other smaller airlines operate schedules domestic and international
services, as well as charter services
Established in 2010 and based in
Tabriz, ATA Airlines serves over 12
destinations.
Overview
Tabriz
Source: Euromonitor Iran Travel Industry 2014, © 1BlueHorizon Group Analysis
Aircraft Total Orders
Passengers
Year of
entry
Comment Potential
J Y Total
Airbus A320-200 4 0 --- --- 180
McDonnell Douglas MD-83 6 0 --- --- 161
TOTAL 10 0
Established in 1989 and operating
from Kish Island, the airline serves
over 18 destinations.
Overview
Kish Island
Aircraft Total Orders
Passengers
Year of
entry
Comment Potential
J Y Total
Fokker 100 3 0 --- --- 117
McDonnell Douglas MD-82 5 0 --- --- 160
McDonnell Douglas MD-83 4 0 --- --- 162
TOTAL 12 0
30. 29© 2014 1BlueHorizon Group - www.1bluehorizon.com All rights reserved1BHG | VIEWPOINT IRANIAN AIRLINES SECTOR 13.11.2014
FINALIZEDP R O P R I E TA R Y I N F O R M AT I O N
Other smaller airlines operate schedules domestic and international
services, as well as charter services (cont’d)
Established in 1993 and operating
from Tehran-Mehrabad, Caspian
Airlines serves over 20 destinations.
Overview
Source: Euromonitor Iran Travel Industry 2014, © 1BlueHorizon Group Analysis
Aircraft Total Orders
Passengers
Year of
entry
Comment Potential
J Y Total
McDonnell Douglas MD-82 1 0 --- --- 160
McDonnell Douglas MD-83 4 0 --- --- 162
TOTAL 5 0
Established in 1993 and operating
from Qeshm Island, the airline
serves over 22 destinations.
Overview
Qeshm Island
Aircraft Total Orders
Passengers
Year of
entry
Comment Potential
J Y Total
Airbus A300-600 5 0 24 283 307
Airbus A320-200 3 0 12 144 156
Avro RJ100 4 0 0 110 110
Fokker 100 4 0 --- 117 117
TOTAL 12 0
Tehran
31. 30© 2014 1BlueHorizon Group - www.1bluehorizon.com All rights reserved1BHG | VIEWPOINT IRANIAN AIRLINES SECTOR 13.11.2014
FINALIZEDP R O P R I E TA R Y I N F O R M AT I O N
The Fokker 100 is a medium size twin-turbofan airliner. With very low operational
costs in the 100-seat short-range class made it a best seller when it was introduced
in the late 1980s.
The production ended in 1997 with 283 airframes delivered. Today around 200
Fokker 100 aircraft remained in airline service with 47 airlines around the world .
Fokker 100 are available in the market and ideal to build a ‘Low Cost’ regional
network within and around Iran. The market price unit, the maintenance cost and the
fuel consumption are also very attractive (at least for the next ten years).
Fokker 100 (or even Fokker 70)
The Airbus A320 family consists of short- to medium-range, narrow-body,
commercial passenger jet airliners manufactured by Airbus Industrie. The family
includes the A318, A319, A320 and A321, and the ACJ business jet (passenger
capacity ranges from 100, on the A318, to 220, on the A321).
On 1 December 2010, Airbus officially launched the new generation of the A320
family with the A320neo "New Engine Option“ (with fuel savings of up to 15%).
Airbus A320 aircraft are available in the market and still a very good aircraft for the
coming decade despite the coming improved version.
Airbus A320 family
If for the Regional network a fuel-efficient fleet is essential today, Iranian
airliners continue to purchase Fokker 100 and/or Airbus A320 aircraft types
Note: Many aircraft in very good conditions are available in the market (Asia, South America, etc.)
Source: Manufacturers websites, Fokker Services www.fokkerservices.com, © 1BlueHorizon Group Analysis
32. 31© 2014 1BlueHorizon Group - www.1bluehorizon.com All rights reserved1BHG | VIEWPOINT IRANIAN AIRLINES SECTOR 13.11.2014
FINALIZEDP R O P R I E TA R Y I N F O R M AT I O N
A300-600 (‘Mahan Air’) A300-600 (‘Qeshm Airlines’)
A300 B2-200 / B4 -200
to be phase out…
The Airbus A300B2-200 is the first
production version of the program
launched in 1972 as the world's first
twin-engined widebody (the first
product of Airbus Industrie).
The B2/B4 are 3-crew widebody and
the maintenance cost and fuel burn
very high.
to be converted as freighter, or…
The Airbus A300-600 and A310 -200/-300 are the world's first 2-crew
widebody airliner with similar cockpit , eliminating the need for a flight
engineer, including single type rating which ease operations.
High demand in the market for (converted) freighters.
build on the experience (incl. crew)
keep some for conversion (2 to 4)
sell the rest to finance the P2F program
For the short to medium range fleet, the time for the Airbus A300 family
aircraft is over, at least as passenger aircraft (P2F to be considered)
Note: At least EADS-EFW in Dresden Germany and MNG Technic in Turkey are offering Passenger to Freighter (P2F) conversion programs.
33. 32© 2014 1BlueHorizon Group - www.1bluehorizon.com All rights reserved1BHG | VIEWPOINT IRANIAN AIRLINES SECTOR 13.11.2014
FINALIZEDP R O P R I E TA R Y I N F O R M AT I O N
The Boeing 747 is a wide-body commercial airliner and cargo transport aircraft, often
referred to by its original nickname, Jumbo Jet, or Queen of the Skies. It was the first
wide-body ever produced.
The -100 was the original variant launched in 1966. The−200 model followed in 1971,
featuring more powerful engines and a higher MTOW. Passenger, freighter and
combination passenger-freighter versions of the −200 were produced. The
shortened 747SP (special performance) with a longer range was also developed, and
entered service in 1976.
Boeing 747 SP / -100 / -200 / 200C / - 200BM
The comfort and Economics of old 747 are not anymore at the industry standard,
not eco-friendly with old engine technology associate with high fuel burn...
Alternate to be considered
If at this stage Iran Air is only considering the
second hand market, we recommend to consider
either the Airbus A330/A440 family (Iran
Aseman)… B747-400 (Mahan Air). Or older
B777-200 until the B-747-8 will be available
there…
Finally, for the ‘long haul’ fleet, we don’t believe that old Boeing 747 are still
the appropriate aircraft, despite the available maintenance knowledge
Note: Many aircraft in very good conditions are available in the market or will be available with ongoing fleet renewable (Middle East, Asia, South America, etc.)
Source: Manufacturers websites, © 1BlueHorizon Group Research &Analysis
34. 33© 2014 1BlueHorizon Group - www.1bluehorizon.com All rights reserved1BHG | VIEWPOINT IRANIAN AIRLINES SECTOR 13.11.2014
FINALIZEDP R O P R I E TA R Y I N F O R M AT I O N
With a captive market over 80 million people, the future look bright soon or
later with sound growth ahead – but the sanctions are still in place, so far!
Source: © 1BlueHorizon Group Analysis, CNN report September 2015 (http://edition.cnn.com/2015/09/09/travel/irans-aviation-industry/)
Since news of the Iran nuclear deal broke, lots of business clients have been calling up, BUT we have been
forced to give them a bit of a cold shower…
There's this expectation, or assumption, in the business community that the sanctions are being lifted, when, in
fact, the U.S. legal framework is scheduled to remain in place…
Only a small fraction of U.S. sanctions — the ones related to Iran's nuclear activities — will be suspended as
part of this deal.
A senior Obama administration official put it this way in a briefing with reporters: ‘We are not removing our
trade embargo on Iran.’
There is one big exception: the civil aviation industry. Once inspectors have certified that Iran is complying with
the agreement, likely sometime early next year, companies such as Airbus and Boeing will be able to sell civilian
aircraft and parts to Iran. Industry officials say that could mean sales of 400 aircraft worth $20 billion in the next
decade!
OEMs spokesmen are all saying that their company is reviewing the agreement, but won't comment until the
U.S. government gives further direction… but at the same time it is obvious that Negotiations with the
manufacturing giants are under way!
At 1BlueHorizon we are pointing out that Europe's sanctions, which are far less extensive and longstanding than
U.S. sanctions, will be lifted quickly…
The nuclear talks could still disrupt momentum. But as the international business elite set their sights on Iran, the
new player is determined to welcome them with a world-class travel network.
1BlueHorizon Group® understanding related to the sanctions status:
35. 34© 2014 1BlueHorizon Group - www.1bluehorizon.com All rights reserved1BHG | VIEWPOINT IRANIAN AIRLINES SECTOR 13.11.2014
FINALIZEDP R O P R I E TA R Y I N F O R M AT I O N
To date, true sanctions are still hurting Iranian commercial aviation by
denying Iranian airlines access to safe and modern aircraft.
Source: © 1BlueHorizon Group Research & Analysis
With respect to U.S. sanctions against Iranian Airlines and Aviation not allowing them to order or
purchase any airplanes, and only being allowed to purchase airplanes which is older than 10 years.
It is notorious that out of Iran’s 250 commercial planes, about
150 were flying while the rest are ‘not functional’ due to a
lack of spare parts...
The National Development Fund of Iran has reportedly put
aside $500m for purchasing aircraft and the same amount for
the purchase of spare parts…
Head of Iran’s Civil Aviation Authority mention a few times
that Iran would seek mass purchases of aircraft if the
sanctions, which prevented the country from buying Western
aircraft since the 1970s, were lifted…
‘Once’… Iranian airlines will be ready to buy at least 40
passenger planes every year for 10 years…with an
estimated value of around USD18 billion!
‘Don’t wait to liaise with the Iranian Airline Sector because at
1BlueHorizon Group® we have a feeling that if the windows and
doors are open, we have to be there…’
36. 35© 2014 1BlueHorizon Group - www.1bluehorizon.com All rights reserved1BHG | VIEWPOINT IRANIAN AIRLINES SECTOR 13.11.2014
FINALIZEDP R O P R I E TA R Y I N F O R M AT I O N
THANK YOU - MAMNUNAM
LEONARD FAVRE
Partner, Group Managing Director
1BlueHorizon Group
Fischrain 88 M +41 79 2080256 (Switzerland)
3063 Ittigen - Bern M +971 50 6164007 (U.A.E.))
Switzerland leof007
leo@1bluehorizon.com
www.1bluehorizon.com
Abu Dhabi | Bern | Madrid | Montreal | Paris
Any clarifications or questions regarding this document should be addressed to:
We are used to generate 1BlueHorizon® out of the Rough...
Customers with specialized needs often choose us for our unique
custom turnkey solutions to propel their business further…
37. 36© 2014 1BlueHorizon Group - www.1bluehorizon.com All rights reserved1BHG | VIEWPOINT IRANIAN AIRLINES SECTOR 13.11.2014
FINALIZEDP R O P R I E TA R Y I N F O R M AT I O N
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This presentation has been prepared by 1BlueHorizon Group® (1BHG or the ‘Company’). This presentation does not constitute or form part of any offer to sell or
issue, or invitation to purchase or subscribe for, or any solicitation of any offer to purchase or subscribe for, any securities of the Company or in any other entity, nor
shall this document or any part of it, or the fact of its presentation, form the basis of, or be relied on in connection with, any contract or investment decision, nor does
it constitute a recommendation regarding the securities of the Company or any other company.
The information contained in this presentation has not been independently verified. This presentation does not purport to be all-inclusive or to contain all the
information that a prospective investor in securities of the Company may desire or require in deciding whether or not to offer to purchase such securities.
No representation or warranty, express or implied, is made or given by or on behalf of the Company or any of its affiliates (within the meaning of Rule 405 under the
US Securities Act 1933) (‘Affiliates’), members, directors, officers or employees or any other person as to the accuracy, completeness or fairness of the information
or opinions contained in this presentation or any other material discussed verbally. None of the Company or any of its Affiliates, members, directors, officers or
employees nor any other person accepts any liability whatsoever for any loss howsoever arising from any use of this presentation or its contents or otherwise arising
in connection therewith.
The information in this presentation includes forward-looking statements which are based on the Company's or, as appropriate, the Company's directors' current
expectations and projections about future events. These forward-looking statements may be identified by the use of forward-looking terminology, including the terms
‘believes’, ‘estimates’, ‘plans’, ‘projects, ‘anticipates’, ‘expects’, ‘intends’, ‘may’, ‘will’ or ‘should’ or, in each case, their negative or other variations or comparable
terminology, or by discussion of strategy, plans, objectives, goals, future events or intentions. These forward-looking statements, as well as those included in any
other material discussed at any analyst presentation, are subject to risks, uncertainties and assumptions about the Company and its subsidiaries and investments,
including, among other things, the development of its business, trends in its operating industry, and future capital expenditures. In light of these risks, uncertainties
and assumptions, the events or circumstances referred to in the forward-looking statements may differ materially from those indicated in these statements.
Forward-looking statements may and often do materially differ from actual results. None of the future projections, expectations, estimates or prospects in this
presentation should be taken as forecasts or promises nor should they be taken as implying any indication, assurance or guarantee that the assumptions on which
such future projections, expectations, estimates or prospects have been prepared are correct or exhaustive or, in the case of the assumptions, fully stated in the
presentation. Forward-looking statements speak only as of the date of this presentation. Subject to obligations under the listing rules and disclosure rules made by
the Financial Services Authority under Part VI of the Financial Services and Markets Act 2000 (as amended), neither the Company nor any of its affiliates, or
individuals acting on its behalf, undertakes to publicly update or revise any such forward-looking statement, whether as a result of new information, future events or
otherwise. As a result of these risks, uncertainties and assumptions, you should not place undue reliance on these forward-looking statements as a prediction of
actual results or otherwise.
The information and opinions contained in this presentation and any other are material discussed verbally are provided as at the date of this presentation and are
subject to verification, completion and change without notice.
In giving this presentation, neither the Company nor its advisers and/or agents undertakes any obligation to provide the recipient with access to any additional
information or to update this presentation or any additional information or to correct any inaccuracies in any such information which may become apparent.
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FINALIZEDP R O P R I E TA R Y I N F O R M AT I O N
ABOUT 1BLUEHORIZON GROUP ®
P R O P R I E TA R Y I N F O R M AT I O N
37© 2014 1BlueHorizon Group - www.1bluehorizon.com All rights reserved
A b u D h a b i | B e r n | L o n d o n | M a d r i d | M o n t r e a l | P a r i s
1BHG | VIEWPOINT IRANIAN AIRLINES SECTOR 13.11.2014
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FINALIZEDP R O P R I E TA R Y I N F O R M AT I O N
Source: © 1BlueHorizon Group | Corporate profile
1BlueHorizon Group® value proposition is simple — Going the Extra Mile by
generating trust to propel your business further
O 1BlueHorizon Group® (Asset Management | Management Consulting | Interim Management) was established in
2007 as a network of International aviation professionals, providing objective, independent, evidence-based
analysis, advice and implementation support. We build on the experience of our team to help clients realize real
and measurable results, quickly. Start-ups, restructuring, cost cutting, project management office, due-diligence or
exploiting growth opportunities, we have experts who have faced these challenges.
O Our highly competent seasoned senior professional have experience from leading companies in both
management roles within their disciplines and as senior level professional advisors throughout diverse and
complex locations in the Middle East, Europe, Africa, Asia Pacific and North America.
O Privately owned, 1BlueHorizon Group® is independent of any financial institution, manufacturer, operator,
insurance company or maintenance provider assuring our clients the benefit of truly
unbiased, comprehensive and flexible provision of service.
O 1BlueHorizon Group® believes in working closely with client staff to transfer
our knowledge and experience, which means 1BlueHorizon Group® continues
to deliver value long after the project is complete.
O A unique blend of languages, age groups, cultural backgrounds and skills
qualifies 1BlueHorizon Group® to provide turnkey solutions for any and
all of your aviation requirements - worldwide.
O 1BlueHorizon Group® range of services is continuously tailored and adapted
to suit the geographical scope and needs of our customers.
P R O P R I E TA R Y I N F O R M AT I O N
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FINALIZEDP R O P R I E TA R Y I N F O R M AT I O N
Wataniya Airways - Chairman Mr. Abdulsalam Al
Bahar with Mrs Ghaida Abdul Latif, vice chairman –
director general & CEO of Syrian Arab Airlines.
Flydubai - CEO Mr. Ghaith Al Ghaith
Gulf Air - Ex CEO Samer Majali
H.E. Mohamed Hamad bin Azzan Al
Mazrouei, WRDC's Director General and
Acting Under Secretary of the Court of the Ruler's
Representative in the Western Region (al Gharbia)
of Abu Dhabi Emirate
Democratic Republic in Congo (Transport)
AerospaceOne Company in India
Jet Green in Pakistan
Ababeel Air in Libya
His Highness Sheikh Ahmed Bin Saeed Al
Maktoum, President of the Dubai Civil Aviation
Authority, Chairman of Dubai Airports, Chairman &
Chief Executive of Emirates Airline & Group
1BlueHorizon Group® is working for leading companies in different fields of
the Aviation industry: Airliners, Airports, Aerospace and Authorities
Note: A list of qualifications is made available separately
P R O P R I E TA R Y I N F O R M AT I O N
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FINALIZEDP R O P R I E TA R Y I N F O R M AT I O N
Family conglomerates (Governance, Portfolio analysis and investment Strategy)
Economic development (Business review / Cluster / Project Management office)
Air Transportation (Airline / Airport / General Aviation / Aerospace & Defense)
Management Consulting
Operational
Improvement
Our understanding of operational
improvement is quite simple:
Whereas restructuring is about
stabilizing a company and fixing
how it does things, operational
improvement is about seeing a
company through the
transformation of becoming more
competitive – going the Extra
Mile.
Asset Management
Fleet Strategy &
Planning
With our Fleet Solutions, we can
help you expand your fleet,
transition from older models to
newer aircraft types, or provide
interim capacity. We back our
support with a global team of
technical experts and industry
specialists who will provide you
with the fleet solution and
support that meets your specific
needs.
Interim Management
Knowledge transfer
Finding talent is difficult even at
the best of time. Finding
resources to assist for a short-
term assignment of a proven
heavyweight interim executive
manager to manage a period of
transition, crisis or change within
an organization or to take on
critical projects or senior
positions for a limited time is
even more difficult.
Ahead of Strategies
Three Practices
Shareholders and management
of companies with specialized
needs often choose 1BHG for our
unique custom turnkey solutions.
If you want a business plan or a
feasibility study to assess the
case, or your are burning cash
and running into trouble, or seek
help to assess the case for
entering immunized joint venture
or looking for an interim
management solution…
1BlueHorizon Group® highly
competent seasoned professional
will assist you to propel your
business further… Going the
extra mile ahead of strategies …
1BHG® Business model dedicated to particular Sectors is built around three
Practices providing clients with turnkey solutions to maximize Value Creation
Source: © 1BlueHorizon Group | Business model with Sectors (Horizontals) & Practices (Verticals)
P R O P R I E TA R Y I N F O R M AT I O N
… no matter how complex the issues are!
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FINALIZEDP R O P R I E TA R Y I N F O R M AT I O N
Interim
Manage-
ment
Managing
Consulting
Asset
Management
The Management
Consulting (MC) Practice
is our ability to strike a
rapport working side by side
with you and quickly
understanding what you
need when the margin of
error is thin… Providing a
highly targeted surgical
strike (to-the-point) to
improve de performance and
going the extra mile…
The Interim Management
(IM) Practice help you by
giving comfort and control
with relevant seasoned
advisors whenever and
wherever they are needed…
Whereas a management
consultant provides an
advisory role, Interim
managers with performance
improvement focus are
directly responsible in
delivering quick results,
visible and measurable...
The Asset Management
(AM) Practice works
individually with each of our
clients to develop creative
strategies and solutions for
all types of aviation
equipment, with innovative
financing models.…
Source: © 1BlueHorizon Group | Practices
Performance improvement
Quick results / Hands-on
Turnkey solutions
Knowledge transfer
Ahead of Strategies…
The 1BlueHorizon® difference
1BlueHorizon Group® three dedicated Practices are built to propel clients
business further with a comprehensive approach ahead of strategies
P R O P R I E TA R Y I N F O R M AT I O N
GENERATINGTHRUSTTO PROPEL
YOUR BUSINESS FURTHER...
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FINALIZEDP R O P R I E TA R Y I N F O R M AT I O N
1BlueHorizon Group® Aviation Competence Areas
Due Diligence
(Merger & Acquisition)
Air Cargo Business
Network Strategies &
Capacity optimization
Market Intelligence
Turnkey projects
Restructuring &
Performance Improvement
Industry attractiveness
Natural
development
Divest /
strategic hold
Low Moderate High
Selective
development
Competitiveposition
Dominant
Strong
Favourable
Defendable
Weak
Industry attractiveness
Natural
development
Divest /
strategic hold
Low Moderate High
Selective
development
Competitiveposition
Dominant
Strong
Favourable
Defendable
Weak
Alliances
Passenger experience
& Service optimization
Non-core Aviation
Activities
Ground &
Aircraft Handling
MRO & Maintenance
Airline Strategy
& Start-up
Fleet Management
& Sourcing
Air Authorities support
Airport Expansion
Marketing , Sales
Loyalty Programs
Source: © 1BlueHorizon Group | Aviation Competence Areas
Our expertise covers the entire breadth of the air-transportation business
areas and is ideally suited to support Iran current and future requirements
P R O P R I E TA R Y I N F O R M AT I O N
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FINALIZEDP R O P R I E TA R Y I N F O R M AT I O N
“1BlueHorizon Group is the
only consulting firm that
works successfully on all
levels: Board level, middle
management,
implementation"
“1BHG senior personnel
come in with strong
views but integrate
perfectly in our teams"
“1BHG has
convinced us
through it's excellent
industry- and
technology
expertise"
"The 1BHG team
knows perfectly well
how to push the
necessary change"
“1BHG guys are implementation -
oriented and their cooperation
with my people is very good "
“1BHG Practice has
very qualified people
who really know a lot
about our industry"
Testimonials - What do our Customers think about 1BlueHorizon Group®
"In each project step, we
could clearly identify
1BHG's added value and
improve the overall
bottom line"
THE ONLY WAY TO DO GREAT WORK IS TO LOVE WHAT WE DO…
A MILE OF RUNWAY WILL TAKE YOU ANYWHERE
NO ONE HAS EVER COLLIDED WITH THE SKY
Note: A list of qualifications is made available separately
P R O P R I E TA R Y I N F O R M AT I O N
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FINALIZEDP R O P R I E TA R Y I N F O R M AT I O N
Published books and decisive management theories that facilitate critical
dialogue and support 1BlueHorizon creation
A short selection of inescapable aviation related books
“Baseline”
(Philosophy)
“Low Cost
Carriers”
“Courier services”
“Various”
Airlines’
Turnaround
“Air Transport
Management”
Source: © 1BlueHorizon Group | Recommended bibliography (non exhaustive)
Partners Network – Aviation Sector
P R O P R I E TA R Y I N F O R M AT I O N
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FINALIZEDP R O P R I E TA R Y I N F O R M AT I O N