Iran air industry hit hard by US sanctions

Iran air industry hit hard by US sanctions


US sanctions are pushing Iran’s weakened aviation sector toward deeper isolation, making international travel less predictable and raising new risks for trade and cargo. 

Earlier in September as part of “operation economic outcast,” the US Treasury Department targeted Iran’s aviation sector, including Iranian airlines and companies providing ground handling, ticketing or airport support, which face secondary sanctions and potentially lose access to the US financial system. 

The United States cannot directly order foreign airports to reject Iranian aircraft. But the threat of secondary sanctions can make servicing them too risky for airports, fuel suppliers and aviation companies. 

For Tehran, the aviation sanctions are another layer of Washington’s broader pressure campaign, alongside restrictions on banking, shipping, insurance and trade.

Washington argues that Iranian airlines have served not only civilian passengers but also military and security networks. 

For example, Mahan Air has been accused of supporting the Islamic Revolutionary Guard Corps (IRGC) and helping transport personnel and equipment. 

The issue has also been debated inside Iran. Former Foreign Minister Mohammad Javad Zarif said in a 2021 interview that Qassem Soleimani had used civilian aircraft to move forces and equipment to Syria. 

For Washington, such links help justify targeting aviation networks. For ordinary travelers, however, the immediate result is canceled flights and fewer ways to leave or return to the country. 

Major Middle East routes canceled 

Iranian flights to Baghdad and Muscat have been suspended or canceled, while Azerbaijan and Georgia also stopped accepting flights operated by Iranian carriers. An Iranian travel agency told DW anonymously for safety reasons that routes to Oman, Iraq, Azerbaijan and Georgia have been seriously disrupted. 

On September 24, Turkmenistan refused permission for an Iranian aircraft flying from Tehran to Dushanbe to cross its airspace, forcing the plane to return to Iran. 

Turkey, Armenia and China have not announced blanket restrictions, the agency said, but passengers were increasingly reluctant to buy tickets because even a confirmed booking did not guarantee departure. 

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A passenger told DW that agencies would still sell him a ticket but could not guarantee the flight would actually operate. 

As part of the sanctions package, the US also suspended the “J-1” general license, which had allowed certain non-Iranian aircraft to make temporary stops in Iran under specific conditions, including that control of the aircraft remained with the foreign operator and that the stay did not exceed permitted limits. 

Many commercial aircraft contain US-made parts or technology, meaning operations involving Iran can fall under US sanctions rules. 

The suspension of J-1 has increased the legal and financial risks for airlines, airports, fuel suppliers, ground-handling companies and other service providers, who now must calculate the risk of secondary sanctions.

More travelers use land crossings

With air connections increasingly uncertain, more passengers are turning to land crossings. 

One traveler whose flight was canceled told DW that he traveled overland from Iran to Turkey before continuing to Istanbul by air. 

“The border was very crowded. A lot of people were trying to leave because they were worried the routes might close,” he told DW anonymously.

For families, older people, students and patients, however, crossing a land border and continuing by road and air can be far more difficult than taking a direct flight. Costs also rise quickly as passengers add road transport, accommodation and additional flights to journeys that previously required a single ticket. 

Also affected is air freight, which is important for urgent or sensitive goods, including some medicines, medical equipment, industrial parts and laboratory samples. 

That has become more significant as Iran simultaneously faces severe restrictions on maritime trade. 

Iran’s shaky aviation industry

Iranian aviation already faced structural problems before the latest sanctions. 

Transport Minister Farzaneh Sadegh previously acknowledged that some flights operate without radar guidance, leaving pilots with greater responsibility for navigation. 

An ageing fleet, difficulties obtaining spare parts, years of sanctions and fewer operational aircraft have all put pressure on airlines. 

When passengers must also consider destination airports refusing services, lengthy delays or flights being canceled without warning, buying a ticket becomes a calculation of risk. 

Alireza Salavati, political economy analyst and managing director of the London-based Middle East Analytica, said that the loss of air links will be unlikely to cause a large, immediate hit to Iran’s GDP.

“Iran’s aviation sector is small by regional standards. Unlike Turkey or the UAE, the country is not a major international hub, and its commercial fleet is limited. Officials said in July that roughly 150 aircraft were in the operational pool, with only about half of them operational at any given time,” Salavati told DW. 

“The damage is more apparent in connectivity. For a heavily sanctioned economy, flights still matter for business, the diaspora, students, specialist workers and medical treatment abroad. For patients, a once-direct journey can become a detour through a third country, with extra travel, accommodation and sometimes visa costs. Time can matter as much as money,” Salavati added. 

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Iran isolated by air and sea

Foreign airlines had already sharply reduced services to Iran before the latest measures. 

Many passengers relied on Iranian carriers to reach regional hubs such as Istanbul, Muscat, Baghdad or Yerevan, then continued with foreign airlines. 

If those first connections disappear, Iran’s international aviation network could increasingly be reduced to a handful of routes that remain politically and commercially viable. 

The development also comes as Iran faces restrictions at sea. Disruption around the Strait of Hormuz, higher insurance and freight costs and pressure on southern ports had already made imports and exports more difficult. 

If maritime trade becomes more expensive while air links also contract, Iran will become increasingly dependent on land borders and indirect routes through neighboring states. 

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Edited by: Wesley Rahn 

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