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Iran Air says capacity hit by costs, U.S. sanctions

TEHRAN, Aug 24 (Reuters) - Iran 's national airline cannot increase capacity in line with growing demand because of U.S.-imposed sanctions and budget limitations, the airline's managing director said.

"Because of financial limitations and the issue of sanctions, plans to add to our airliners were scrapped," Ahmad Reza Kazemi was quoted by Kar Va Kargar newspaper as saying on Thursday.

"According to the plans, we need 23 new aeroplanes on domestic routes and 18 for international flights to upgrade our fleet and meet the demand," Kazemi said.

He said Iran Air had only managed to sign contracts for four new Airbuses. He did not name the specific model purchased but earlier plans called for four A-330s to join the fleet.

Iran Air carries more than 7.5 million passengers a year on its 30 aircraft, mostly Boeings acquired before the 1979 revolution. Apart from new Airbus deal, the airline has bought only six Fokker F100s and two Airbus A300-600s since 1979.

U.S. sanctions bar sales of Boeing airliners to the Islamic Republic and hinder the acquisition of other aircraft, many of which rely on U.S.-built engines or other components.

Despite unexpectedly high prices for crude oil, Iran 's top export, the country is strapped for cash, further limiting Iran Air's expansion plans.

Industry analysts expect that Iran Air was likely to rely exclusively on Airbus to replace its aging fleet of Boeings, which consists of roughly eight old 747s and nine 727s and 737s.


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