Iran Air CEO Farhad Parvaresh was recently quoted as saying that the airlines shares "Are currently valued at 14.4 trillion rials (some $1.2 billion)" and that he "Plans to sell half its shares plus one on the stock market by the end of the current Iranian calendar year (March 19, 2012)" i.e. within the next 3 weeks.
Considering Iran Air's historical financial performance, the run-down state of its tangible assets and also the huge (relatively) workforce overhead, it looks like the value of the airline has been significantly overstated. Obviously Mr Parvaresh doesn't want to "undersell" his airline, but at the same time needs to be realistic about the technical condition of Iran Air's aircraft given the major difficulties they experience with maintenance and air safety standards that have resulted in all of their Boeing 747's & 727's along with their A320's being banned from EU airspace by the European commission:
It would be interesting to get some thoughts from fellow anet users on the current realistic value of Iran Air, supposing that an airline with crippling sanctions possesses any shareholder attraction in the first place..?
jetjack74 From United States of America, joined Jul 2003, 7336 posts, RR: 52 Reply 1, posted (1 year 2 months 3 weeks 4 days 21 hours ago) and read 5969 times:
I think we all know what this means. Iran Air will a worthless government enterprise masquerading as a "private" company, which it will be no such thing.
planenutz From United States of America, joined Dec 1999, 1267 posts, RR: 12 Reply 4, posted (1 year 2 months 3 weeks 4 days 19 hours ago) and read 5742 times:
I had read somewhere (can't remember exactly) that Iran Air may have a lot of assets overseas, including significant property holdings in London, Paris, and Tokyo. These are assets that have gained in tremendous value since they were first acquired in the mid to late 1960's. I dont know how much this would contribute to the coffers, but I';m sure more than just a nominal amount.
PanHAM From Germany, joined May 2005, 7771 posts, RR: 26 Reply 6, posted (1 year 2 months 3 weeks 4 days 18 hours ago) and read 5599 times:
of course the sanctions would still apply. That goes for any assets such a company may have overseas as well, as long as these assets can be identified belonging to that company.
haveasafeflight From , joined Dec 1969, posts, RR: Reply 7, posted (1 year 2 months 3 weeks 4 days 7 hours ago) and read 2841 times:
Quoting bennett123 (Reply 5): If privatised, would the current sanctions be affected.
Iran Air CEO Farhad Parvaresh seems to think so - in an interview with the UK's Financial Times last year he was quoted as saying: "When Iran Air is privatised, our hands will be more open in dealing with sanctions and buying aeroplanes and spare parts".
Well Iran is currently exporting its oil to China with a 40% discount, so I am sure that if they are interested they are not going to worry about the price that much.
haveasafeflight From , joined Dec 1969, posts, RR: Reply 9, posted (1 year 2 months 3 weeks 3 days 16 hours ago) and read 2371 times:
Quoting ju068 (Reply 8): Well Iran is currently exporting its oil to China with a 40% discount, so I am sure that if they are interested they are not going to worry about the price that much.
Lets say (for the sake of argument) that a 40% discount was offered to China or any other party for that matter on Iran Air's claimed value of $1.2Billion, that still amounts to a cool $720Million. In it's current state (especially the state of the airplanes) is Iran Air realistically worth that amount?
ju068 From Serbia, joined Aug 2009, 2579 posts, RR: 6 Reply 10, posted (1 year 2 months 3 weeks 3 days 16 hours ago) and read 2350 times:
Quoting haveasafeflight (Reply 9):
Lets say (for the sake of argument) that a 40% discount was offered to China or any other party for that matter on Iran Air's claimed value of $1.2Billion, that still amounts to a cool $720Million. In it's current state (especially the state of the airplanes) is Iran Air realistically worth that amount?
God no, but what I am saying is that because of the cheaper oil and close relationship between the two countries we might see a Chinese company purchasing Iran Air. And anyway, even if the Chinese company is interested in buying it, I am sure that we are not going to know how much they actually paid for it.
This is probably just for the public to create a different image of the airline.
PanHAM From Germany, joined May 2005, 7771 posts, RR: 26 Reply 11, posted (1 year 2 months 3 weeks 3 days 15 hours ago) and read 2294 times:
It does not change anything if Iran Air is bought by a foreign corporation, except that they would lose their third country traffic rights straight away. Otherwise, it would still be an Iranian company and no matter oif private or government owned, they face certain restrictions.
BTW, I could imagine that Iran is bartering its oil for weapons etc, but 40% under market price? The Mullah#s know the prices and they don't hand out giveaways.
ju068 From Serbia, joined Aug 2009, 2579 posts, RR: 6 Reply 12, posted (1 year 2 months 3 weeks 3 days 12 hours ago) and read 2184 times:
Quoting PanHAM (Reply 11): BTW, I could imagine that Iran is bartering its oil for weapons etc, but 40% under market price? The Mullah#s know the prices and they don't hand out giveaways.
40% to China and India, not the rest of their customers. Countries such as South Africa, Sri Lanka or Turkey get it at a normal price, so it's not really a loss for Iran.
YOWza From Canada, joined Jul 2005, 4781 posts, RR: 17 Reply 13, posted (1 year 2 months 3 weeks 3 days 11 hours ago) and read 2177 times:
Quoting ju068 (Reply 12): 40% to China and India, not the rest of their customers. Countries such as South Africa, Sri Lanka or Turkey get it at a normal price, so it's not really a loss for Iran.
Not that I don't believe you but do you have a source for this?
PanHAM From Germany, joined May 2005, 7771 posts, RR: 26 Reply 14, posted (1 year 2 months 3 weeks 3 days 11 hours ago) and read 2155 times:
Quoting YOWza (Reply 13): Not that I don't believe you but do you have a source for this?
I do not believe it actually, that figure is realistic, if at all, only in connection with barter trades where they exchange the oil for goods they otherwise don't get.
But, a puchase of IR by foreign investors would not solve the problems of that airline.
OA260 From Ireland, joined Nov 2006, 24907 posts, RR: 60 Reply 15, posted (1 year 2 months 3 weeks 3 days 11 hours ago) and read 2126 times:
Quoting planenutz (Reply 4): I had read somewhere (can't remember exactly) that Iran Air may have a lot of assets overseas, including significant property holdings in London
Yes they do indeed. Their office on Piccadilly is worth a mint ! Not many have Airline offices on this street anymore. SU still have theirs but in the old days PA/LH/AZ/AF/ME/TW/OA all had offices there.
The IR branded Concorde model in the window would also fetch a few pounds
[Edited 2012-02-28 08:02:50]
OLYMPIC AIR - ΟΛΥΜΠΙΑΚΗ "Η ΕΛΛΑΔΑ ΨΗΛΑ" "GREECE FLYING HIGH"
haveasafeflight From , joined Dec 1969, posts, RR: Reply 17, posted (1 year 2 months 3 weeks 3 days 10 hours ago) and read 2063 times:
Quoting OA260 (Reply 15): Yes they do indeed. Their office on Piccadilly is worth a mint !
Don't mean to split hairs but Iran Air no longer owns the Piccadilly office as they had to relocate to more "affordable" premises in Hammersmith London:
For sure their overseas assets (the ones they actually own vs rent) are valuable, but even with these considered I think the true value of the airline is way short of the $1.2Billion claimed by their CEO Farhad Parvaresh.
Time will tell I guess, and I've got my humble pie ready to eat if they should in fact obtain a relative market capitalization to the tune of $1.2Billion - I doubt it though.
OA260 From Ireland, joined Nov 2006, 24907 posts, RR: 60 Reply 18, posted (1 year 2 months 3 weeks 3 days 10 hours ago) and read 2032 times:
Quoting haveasafeflight (Reply 17): Don't mean to split hairs but Iran Air no longer owns the Piccadilly office as they had to relocate to more "affordable" premises in Hammersmith London:
WOW didnt know that I was there around Christmas so this must be a recent enough move!
OLYMPIC AIR - ΟΛΥΜΠΙΑΚΗ "Η ΕΛΛΑΔΑ ΨΗΛΑ" "GREECE FLYING HIGH"
haveasafeflight From , joined Dec 1969, posts, RR: Reply 19, posted (1 year 2 months 3 weeks 2 days 10 hours ago) and read 1747 times:
Quoting OA260 (Reply 18): WOW didnt know that I was there around Christmas so this must be a recent enough move!
I understand they completed their move to Hammersmith around mid January this year. I'm not sure if they actually own their new office in Hammersmith or are renting it - does anyone have any info?
Although not my preferred choice of language, I am inclined to agree with you as the author of the article failed to cite any sources to back-up their statement.
As a side note, I know how disciplined the anet forum moderators are in enforcing the forum usage rules so please everyone lets try to keep this thread aligned to the aviation side of things
Any further thoughts on the claimed $1.2Billion value of Iran Air - especially given the condition of its fleet?
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