DUBAI: Iran said it had reached an agreement with Boeing Co for the supply of jetliners on Tuesday, reopening the country’s skies to new US aircraft for the first time in decades under an international deal to ease sanctions.

Details of the agreement were left vague, but Western and Middle East sources said that once approved, it would involve flag carrier Iranair acquiring more than 100 Boeing jets, both directly from Boeing and from leasing companies.

“In coming days details of the deal with this company will be announced,” Roads and Urban Development Minister Abbas Akhoundi said, according to the semi-official Mehr news agency.

The sources said the agreement was so far only a broad outline of what a formal deal would look like once Boeing has the necessary US government approvals to sell planes to Iran, which has been banned from buying US jets for almost 40 years.

So far, Boeing has only been granted permission to present its products to Iranair and a handful of other airlines as it tries to catch up with Europe’s Airbus, which earlier this year won a provisional deal for 118 jets worth $27 billion.

“We have been engaged in discussions with Iranian airlines approved by the US government about potential purchases of Boeing commercial passenger airplanes and services,” a Boeing spokesman said by email.

“We do not discuss details of ongoing conversations we are having with customers, and our standard practice is to let customers announce any agreements that are reached. Any agreements reached will be contingent on US government approval.” Reuters reported last week that Iran was edging towards a historic deal to buy jetliners from Boeing for the first time since the 1979 Islamic Revolution and that a deal for more than 100 aircraft could be reached fairly soon.

The chairman of Iranair told Reuters it was also talking to Boeing about providing support for its elderly fleet under last year’s deal between Tehran and six major powers to ease sanctions in return for curbs on Iran’s nuclear activities.

HURDLES REMAIN: Iran needs an estimated 400 jets to renew its fleet after decades of sanctions and prepare for projected growth, according to Iranian and Western estimates.

Two senior Iranian officials said last year that Iran was expected to buy 100 jets from Boeing once sanctions were lifted.

Both Airbus and Boeing would need US export licences to carry out their deals, due to the use of significant US technology in all modern jetliners.

Even then, industry sources caution that both deals could take some time to implement because of uncertainty over financing, with the US financial system still closed to Iran.

The Airbus deal is priced in euros instead of dollars, the currency usually by planemakers, but many banks remain reluctant to finance it because they fear losing their claim to the underlying assets if sanctions are re-introduced, bankers say.

BOC Aviation, a Singapore-based leasing company in which Boeing recently invested as part of its stock market debut, is in discussions with Boeing about financing part of the deal, two people familiar with the matter said.

BOC Aviation was not immediately available for comment. Secretary of State John Kerry said in April US was not against foreign banks doing business with Iran under the nuclear deal, but Iranian Supreme Leader Ayatollah Ali Khamenei has accused Washington of not being committed to the accord.

Published in Dawn, June 15th, 2016