haveasafeflight
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Iran Air CEO: We Will Become Privatized In 3 Weeks

Sun Feb 26, 2012 8:39 pm

Came across a recent story on Iran Air's attempts to privatize the airline:

http://www.tehrantimes.com/component/content/article/95835

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:

http://www.flightglobal.com/news/art...ns-iran-air-a320s-and-747s-344095/
http://www.flightglobal.com/news/art...s-on-mro-and-airworthiness-344160/

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..?

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jetjack74
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RE: Iran Air CEO: We Will Become Privatized In 3 Weeks

Mon Feb 27, 2012 6:09 am

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.
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JU068
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RE: Iran Air CEO: We Will Become Privatized In 3 Weeks

Mon Feb 27, 2012 6:11 am

I wouldn't be surprised if a Chinese company/airlines does buy them...
 
bill142
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RE: Iran Air CEO: We Will Become Privatized In 3 Weeks

Mon Feb 27, 2012 7:25 am

Quoting ju068 (Reply 2):

Not at 1.2 billion. Anyone who pays that is daft.
 
planenutz
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RE: Iran Air CEO: We Will Become Privatized In 3 Weeks

Mon Feb 27, 2012 8:01 am

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.
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bennett123
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RE: Iran Air CEO: We Will Become Privatized In 3 Weeks

Mon Feb 27, 2012 8:15 am

If privatised, would the current sanctions be affected.
 
PanHAM
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RE: Iran Air CEO: We Will Become Privatized In 3 Weeks

Mon Feb 27, 2012 9:08 am

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.
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haveasafeflight
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RE: Iran Air CEO: We Will Become Privatized In 3 Weeks

Mon Feb 27, 2012 8:25 pm

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".

http://www.ft.com/cms/s/0/ebcf3060-c732-11e0-a9ef-00144feabdc0.html
(you need to be registered with the Financial Times website to view this article - you can register for free)

See also:
http://en.iccim.ir/index.php?option=...ne&catid=103:iran-economy-bulletin
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JU068
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RE: Iran Air CEO: We Will Become Privatized In 3 Weeks

Mon Feb 27, 2012 9:18 pm

Quoting Bill142 (Reply 3):

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
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RE: Iran Air CEO: We Will Become Privatized In 3 Weeks

Tue Feb 28, 2012 11:01 am

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?
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JU068
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RE: Iran Air CEO: We Will Become Privatized In 3 Weeks

Tue Feb 28, 2012 11:09 am

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
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RE: Iran Air CEO: We Will Become Privatized In 3 Weeks

Tue Feb 28, 2012 11:52 am

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.
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JU068
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RE: Iran Air CEO: We Will Become Privatized In 3 Weeks

Tue Feb 28, 2012 3:23 pm

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.
 
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yowza
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RE: Iran Air CEO: We Will Become Privatized In 3 Weeks

Tue Feb 28, 2012 3:30 pm

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?


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PanHAM
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RE: Iran Air CEO: We Will Become Privatized In 3 Weeks

Tue Feb 28, 2012 3:44 pm

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.
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OA260
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RE: Iran Air CEO: We Will Become Privatized In 3 Weeks

Tue Feb 28, 2012 3:58 pm

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  Smile

[Edited 2012-02-28 08:02:50]
 
JU068
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RE: Iran Air CEO: We Will Become Privatized In 3 Weeks

Tue Feb 28, 2012 4:02 pm

Quoting YOWza (Reply 13):

Of course, it's not a problem, here is the link:

http://www.huffingtonpost.co.uk/john...ctions-china_b_1227275.html?ref=tw

It was advertized on the web page of the Atlantic Community.
 
haveasafeflight
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RE: Iran Air CEO: We Will Become Privatized In 3 Weeks

Tue Feb 28, 2012 4:50 pm

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:

http://www.iranair.co.uk/news/iranair-moves-to-new-offices

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.
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OA260
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RE: Iran Air CEO: We Will Become Privatized In 3 Weeks

Tue Feb 28, 2012 5:20 pm

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!
 
haveasafeflight
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RE: Iran Air CEO: We Will Become Privatized In 3 Weeks

Wed Feb 29, 2012 5:05 pm

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?
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IR800
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RE: Iran Air CEO: We Will Become Privatized In 3 Weeks

Thu Mar 01, 2012 9:23 am

Quoting ju068 (Reply 16):
http://www.huffingtonpost.co.uk/john...ctions-china_b_1227275.html?ref=tw

"... at discounts that have been ESTIMATED to reach up to 40%"
Totally BS!

Anyway, IF there is any program for privatization, the buyer will surely be an Iranian company.

[Edited 2012-03-01 01:25:04]
 
haveasafeflight
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RE: Iran Air CEO: We Will Become Privatized In 3 Weeks

Fri Mar 02, 2012 5:18 pm

Quoting IR800 (Reply 20):
Totally BS!

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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