Iran is to buy 118 Airbus airliners in a $25 billion deal signed by President Hassan Rouhani on a visit to France.
In his first post-sanctions sweep through Europe, which has already seen Iran strike a string of deals with Italy, Mr Rouhani also reached an agreement with Peugeot Citroen for the modernisation of a Tehran car plant that will start producing 100,000 vehicles a year late in 2017.
The start to the lifting of sanctions at the beginning of the year has seen a rush by European and Indian firms to move into the Iranian market, particularly in the energy sector, while most US firms are still hamstrung by continuing restrictions.
The Airbus deal is one of the biggest to be signed and will include the purchase of 12 A380 'super jumbos' – a plane that has yet to find favour among many airlines.
According to the website Planespotters.net, Iran's passenger airline fleet averages 26.8 years of age and Abbas Akhoundi, the country's transport minister, has estimated that Iran will need 400 medium– and long-haul planes, and 100 short-haul jets, in the coming years.
While Airbus – whose planes' components are manufactured in France, Germany, Spain and the UK – is hoping to fill many of these orders, rivals Boeing is believed to be pushing hard for orders from Tehran, particularly for its 737 and 777 models.
Farhad Parvaresh, chief executive of Iran Air, said, "Today's announcement is a first step towards restoring the prestige of the civil aviation sector in the region, and alongside partners such as Airbus we will offer unparalleled services."
Fabrice Brégier, Airbus president and CEO, said, "The skies have cleared for Iran's flying public and Airbus is proud to welcome Iran's commercial aviation back into the international civil aviation community. Today is a significant step in the overhaul and modernisation of Iran's commercial aviation sector and Airbus stands ready to play its role in supporting it."
British Airways has already confirmed it is looking at resuming flights to Tehran, with Air France and KLM expected to follow suit. Talks are also underway on resuming services between Iran and the US, which have been suspended since the 1979 revolution.
Other deals announced on Thursday included an oil contract with French giant Total and a plan for construction giant Bouygues and Aeroports de Paris to expand Tehran's airport.
Meeting with French business leaders, Mr Rouhani said Iran was looking for investment in "energy, oil, gas, agriculture, modern technology, automobile industry, mining, telecommunications, modernization of air fleet and railways, and tourism cooperation", according to IRNA, Iran's state news agency.
Mr Rouhani arrived in Europe on Monday and within hours of touching down in Italy Iran was unveiling agreements for Saipem to investigate "potential cooperation in revamping and upgrading the Pars Shiraz and Tabriz refineries" and for Danieli to supply heavy machinery and equipment to Iran in a $6 billion deal.
Italian Prime Minister Matteo Renzi will now travel to Iran later this year "to boost economic ties", Mr Rouhani said.
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