Issue 9 - A Sneak Peek into Iran's Aviation Market

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A SNEAK PEEK INTO IRAN’S AVIATION MARKET Airlines currently flying international routes to Iran Aegean Airlines Aeroflot Air Arabia Alitalia ATA Airlines Atlasjet Airlines, Inc. Austrian Airlines Azerbaijan Hava Yollary Belavia Caspian Airlines Service Cham Wings Airlines China Southern Airlines Emirates Etihad Airways Fly Baghdad Airlines flydubai Germania Fluggesellschaft Iran Air Iran Aseman Airlines Iraqi Airways Jazeera Airways Kuwait Airways Lufthansa Mahan Airlines Oman Air Pegasus Hava Tasimaciligi Qatar Airways Queshm Air Shaheen Air International Tajik Air Turkish Airlines Ukraine International Airlines Ukrainian Mediterranean Airlines Airlines who have recently returned to Iran AirAsia X Air France Thai AirAsia X Airlines with intention to return or launch services to Iran Air Astana British Airways KLM Korean Air Thai Airways OUTLOOK OF SINGAPORE - IRAN AVIATION MARKET Singapore – Iran Had Aviation Ties In The 1970s Iran is no stranger to Singapore. Singapore Airlines (SIA) used to link the two counties via twice weekly B707 services to Tehran from July 1977. In lieu of an Air Services Agreement (ASA) between the countries, the service was made possible with a temporary permit issued by the Aeronautical Authorities of Iran. It was only in February 1978, following the conclusion of successful air talks between the two countries, that an ASA was signed between then Senior Minister of State (Communications) Ong Teng Cheong and M H Moniri of Iran at the Port of Singapore Authority (PSA) Towers. However, the Iranian Revolution occurred shortly after in 1979 which resulted in the overthrow of the Pahlavi dynasty under Mohammad Reza Shah Pahlavi Shahanshah Aryamehr. The leadership was eventually replaced with an Islamic republic under the Grand Ayatollah Ruhollah Khomeini. CAAS was then informed that the ASA between Singapore and Iran was nulled as it was signed under the previous leadership which was no longer in power. Till date, there is still no ASA between Singapore and Iran. As a result of this limitation, scheduled flights between the two countries are not possible. However, charters services are permissible and this could be a possible first step in developing air connectivity between Iran and Singapore. Singapore Growing Trade Links With Iran Post-Sanctions The Singapore Government also recognizes the huge potential that Iran presents post-sanctions and is quick to re-establish economics and business ties. Before sanctions were imposed, Singapore’s bilateral trade with Iran amounted to US$6.6 6
A SNEAK PEEK INTO IRAN’S AVIATION MARKET billion dollars in 2011. Trade however fell to US$2.6 billion dollars in 2012, before hitting a record low of about $171 million dollars last year. Following the heels of United Nation lifting the nuclear-related sanctions on Iran, the Monetary Authority of Singapore (MAS) scrapped its prohibition on transactions with Iran on 28 January 2016. This prohibition was imposed on Iran in June 2012 after the Western governments toughened sanctions against the Islamic Republic over its nuclear program. It stopped financial institutions in Singapore from “directly or indirectly entering into, continue to participate in, arrange or facilitate the entering into or continued participation in, or any transaction or business relationships” with Iran. Further, in less than two months after lifting of the sanctions, Mr S Iswaran, Minister for Trade and Industry, led a business delegation to Tehran in February 2016. During his visit, he signed a Bilateral Investment Treaty with Iran’s Minister of Economic Affairs and Finance Ali Tayyebnia, which will grant investors common investment treaty protections. These include the right to fair and equitable treatment, most-favoured-nation treatment, national treatment, protection against expropriation, and a guarantee of free transfer of capital. As such, Singapore businesses can now officially enter into contracts with Iranian companies. Singapore As A Tourist Destination For Iranians Visitor Arrivals from West Asia 80K United Arab Emirates 70K 60K 50K 40K Other Countries in West Asia 30K 20K 10K Saudi Arabia Israel Iran Kuwait 0K 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Source: Singapore Tourism Board Visitor Arrivals (VA) from Iran have shown promising potential over the past 10 years. Iran was Singapore’s 2nd largest West Asia tourist market from 2008 to 2011 despite the lack of a direct air link between Singapore and Iran. Iranian VA has corresponded closely with air capacity changes between Kuala Lumpur and Iran. This is because Iranian visitors typically visit both Kuala Lumpur and Singapore in a single trip and a majority of Iranian visitors crosses over to Singapore by land. Iranians require visa to enter Singapore. According to anecdotal feedback, Iranians will typically apply for the Singapore visa (a) before their travel by submitting their application to an Iran travel 7
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Issue 9 - A Sneak Peek into Iran&#039;s Aviation Market

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Issue 9 - A Sneak Peek into Iran's Aviation Market