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[TEHRAN] Iran Air finalised a contract to buy 80 planes from US firm Boeing, the official IRNA news agency said Sunday, as it seeks to renew its ageing fleet despite sanctions.
IRNA reported that the contract was worth US$16.6 billion, in the first such deal since the 1979 Islamic revolution.
"Fifty of the planes are 737 and the other 30 are the long haul 777 that will be delivered to Iran Air in a period of 10 years," said Farhad Parvaresh, chief executive of the national carrier, who signed the contract with Boeing officials in Tehran.
It is the first deal with an American aviation firm since the revolution, and comes in spite of fresh tensions over sanctions after US lawmakers voted earlier this month to renew measures against Iran.
The lack of new planes and parts has taken a severe toll on Iran's carriers over the years, earning it one of the worst safety records in the world with close to 1,700 people dying in a string of civilian and military air disasters since 1979, according to the Flight Safety Foundation.
"With the signing of this contract, the first important step has been taken for the modernisation of the country's aviation fleet," Transport Minister Abbas Akhoundi was quoted as saying.
Iran Air is also due to finalise the purchase of 100 planes from European firm Airbus.
"Our goal is to increase our ability to compete in the aviation industry to be able to get back our share in the transport industry in the region and the world," said Akhoundi, referring to the fact that Iran was a regional hub for air transport before the revolution.
Following initial agreements earlier in the year, the Boeing and Airbus deals were given final approval by the US government in September.
Washington lifted some of its sanctions on Iran under a nuclear deal that came into force in January, but many restrictions have remained in place that mean companies trading with Tehran must receive explicit approval from the US Treasury.
That includes European firms like Airbus who manufacture some of their parts in the United States.
Pressure has been mounting on those in Iran and the United States who want to see increased trade between the two countries in order to cement the nuclear deal.
Iranian leaders have reacted angrily to news that Washington will renew its existing sanctions in the coming days, saying it is a breach of the deal, while president-elect Donald Trump has vowed to rip up the accord entirely.
Iran's President Hassan Rouhani has faced a barrage of criticism at home after the deal failed to attract the level of foreign investment he promised - mostly because global banks remain wary of doing business with the country.
The supreme leader, Ayatollah Ali Khamenei, has questioned the focus on purchasing billion-dollar fleets of aircraft.
"Suppose we modernise our air fleet. Okay, it's a very important and necessary move. But is it the priority?" Mr Khamenei said in June.