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Airbus-Syria Deal To Skirt U.S. Sanctions Official Tells CBS News European Manufacturer To Supply
State Carrier With 50 Jets
CBS News
European manufacturer Airbus is set to sign a multi-billion dollar deal with Syria's state carrier that would see the U.S.-sanctioned country take possession of 50 new passenger jets
in the next 20 years, a senior Syrian official tells CBS News.
The Bush administration slapped Syria with unilateral economic sanctions four years ago for its alleged support of militants in Iraq and its moves to
destabilize the Western-backed government in neighboring Lebanon.
But, in a direct challenge to the sanctions, a Syrian government official tells CBS News' George Baghdadi that Syrian Air will "lease two
single-aisle Airbus A320s, which offer 107 to 185 seats, before the end of 2008 and another four planes in 2009 to include twin-aisle A330, A340 and A350 models."
"A big Airbus delegation is coming on September
18 to sign the contracts. We will take delivery of the first 14 Airbus airliners from 2010 to 2018 and a further 36 by 2028," said the official, who spoke to CBS on condition of anonymity as he was not authorized to
discuss the deal. He said bank loans would finance the transaction.
The official would not reveal the full details of the contract with Airbus, but leasing passenger jets from a third party appeared to be how the Syrians
and the European manufacturer intended to skirt the sanctions, at least for the first round of aircraft deliveries.
"Now it seems that they may have found a way to do it, or they think they've found a way to do
it," David Kaminski-Morrow, Deputy Editor at Air Transport Intelligence, told CBSNews.com. He said the Syrians have been trying to renew their small and aging fleet with Airbus planes for years.
"There's
nothing to stop Airbus selling aircraft to a non-sanctioned company. Once they own the aircraft, they can sell them to whoever they want to do business with," said Kaminski-Morrow.
An Airbus official in Europe told
CBSNews.com that U.S. investors currently hold approximately 10 percent of the 814,028,673 outstanding shares in EADS, Airbus' parent company. The U.S. government owns no stake in EADS. The Airbus official dismissed the
reported deal with Damascus as "rumor and speculation".
A U.S. diplomat based in Damascus said bluntly that they could not see "any potentiality" that the contract would come to fruition, insisting
the sanctions would stop any such endeavor, regardless of how Syrian Air came to take possession of the aircraft - by direct purchase or lease.
Negotiations over the aircraft acquisition were on the agenda in Paris last
month during a visit by Syrian deputy prime minister for economic affairs Abdullah al Dardari, just a week after the presidents of the two countries met for the first time in the French capital. The governments of France and
Germany are the two largest EADS shareholders.
French President Nicolas Sarkozy said publicly during a visit to Damascus earlier in September that he had discussed with his Syrian counterpart Bashar al-Assad an Airbus
agreement, though he gave no further details.
Sarkozy's visit was a reward for Assad's recent display of flexibility; he agreed in August to establish diplomatic ties with Lebanon, a longstanding demand of the Lebanese
and the West, and he has embarked on indirect peace talks with Israel.
"The deal between Syrian Arab Airlines and Airbus is almost done. There are no obstacles standing in the way," Dardari told reporters after
a ceremony concluding a series of bilateral business contracts between Syria and French oil giant Total last week.
"I don't think the U.S. has managed to dampen foreign direct investment, nor have they succeeded in
stopping economic reforms and liberalization. Sanctions have failed, especially when they are unilateral," he added.
For Syria, which is seeking to renew its image on the world stage after years of isolation by the
West, a deal to renew its sanctions-hit fleet would be a diplomatic triumph.
Syrian Air, set up in 1946, has only five operating Airbus A320s, one aging Boeing 747 and two planes for local flights. The state carrier
employs more than 5,000 people.
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