60% of Iran’s Airline Fleet is in Private Hands

TEHRAN (Iran News) Seyed Hamidreza Sanaei, Deputy for Aviation Affairs at the CAO, told ILNA’s economic desk that the growing number of applications to establish airlines in Iran appears paradoxical at a time when existing operators consistently report financial losses due to the country’s economic difficulties and international sanctions.

“Global restrictions on Iran have created a unique ecosystem in which demand in some industries actually rises,” Sanaei said. “Unlike the rest of the world, we cannot directly purchase aircraft or rely on financing mechanisms such as low-interest loans or leasing agreements. As a result, anyone wishing to enter this sector must pay cash up front, which limits opportunities to only those who have the capital readily available.”

According to Sanaei, there are no companies or individuals in Iran currently able to purchase planes through standard leasing or lease-to-own arrangements. This has forced operators to pool smaller investments. At the same time, he argued, limited trust in the broader Iranian economy and poor experiences in stock and capital markets have driven some investors to aviation, where buying just two aircraft can provide an entry point. “The government also welcomes this model of investment,” he added.

Currently, about 60 percent of Iran’s operational fleet is in private hands. “These private airlines are the ones driving air transport in the country today. Without them, we would be left only with the state-owned carriers Iran Air and Aseman—both of which are already struggling,” Sanaei noted.

He admitted that many operators claim the sector is loss-making, but emphasized that aviation has never lacked investors or participants. “The real losses become apparent once aircraft that were once profitable age and lose efficiency. Running an airline is a tough business, but it continues to attract players,” he said.

Iran currently has 27 active airlines, compared with 47 in Turkey. Yet Sanaei stressed that not all attempts to launch carriers are genuine. “Many who announce plans to establish airlines only go as far as publicity. Dot One Airlines, for instance, was introduced months ago with promises of 30 to 50 aircraft. To date, not a single plane has been imported, and they have only secured preliminary approval,” he explained.

Iranian law places few barriers on the number of airlines that can be established. According to Sanaei, a carrier can be licensed with just three aircraft—one owned outright and two leased. Moreover, under Article 44 of Iran’s constitution, no government body can block new license applications even if the market seems saturated. Sanaei also pointed to the practice of trading Air Operator Certificates (AOC) at inflated prices as a side effect of this regulatory environment.” Airline Fleet”

Despite the media attention, Sanaei said the actual number of serious applications for new airlines is currently fewer than four. Looking ahead, the CAO is studying a shift toward the “air carrier” model used in the United States, where there are 170 such operators. These companies own fleets but do not engage in direct commercial sales. Instead, their aircraft capacity is marketed under the brands of established airlines through code-sharing and rebranding agreements. “This model would allow Iranian airlines to expand sales and operations without the overhead of acquiring entire fleets themselves,” Sanaei explained.” Airline Fleet”

He concluded by emphasizing the need for careful management in an industry constrained by sanctions, high costs, and limited trust in financial institutions, while also acknowledging the role of private investment in keeping Iran’s aviation sector afloat.