Amid a raft of new sanctions stemming from Iran’s attack on Israel, the United States and its European allies also recently warned that further sanctions may be forthcoming if Tehran transfers ballistic missiles to Russia for use against Ukraine. These additional sanctions reportedly include a potential ban on European flights by Iran Air, the Islamic Republic’s flag carrier.

As of this month, five of Iran Air’s wide-body passenger planes still operate scheduled flights between Tehran and Cologne, Frankfurt, Hamburg, Istanbul, London, Milan, Paris, Rome, and Vienna. Despite the limited economic significance of these routes, maintaining them still matters to the regime politically (as a counterweight to its growing international isolation) and tactically (as a vehicle for transporting terrorists, other agents, and illicit items to and from the continent). Yet shuttering these routes will have little practical effect if another key Iranian carrier—Mahan Air—is permitted to expand its own access to Europe via a shadowy network of front companies and other methods.

Iran Air Down, Mahan Up

Over the past few years, financial difficulties have reduced Iran Air’s fleet of usable aircraft to just nineteen—a result of both internal mismanagement and previous sanctions. The United States delisted the ailing airline when the Joint Comprehensive Plan of Action (JCPOA) was in effect between 2016 and 2018. Yet company officials were unable to secure financing and delivery of new planes to replace its retiring fleet by late 2018, when sanctions went back into force after Washington withdrew from the nuclear deal (see next section). As a result, Iran Air operates on the fringes of profitability today.

Meanwhile, Mahan Air—which serves as the de facto airline of Iran’s Islamic Revolutionary Guard Corps (IRGC)—has significantly expanded its operations by procuring numerous wide-body aircraft illicitly, enabling it to replace Iran Air as the country’s largest carrier. Over the past three years in particular, Mahan has taken over many domestic and Asian routes previously operated by Iran Air.

Mahan also recently established a cluster of shadowy subsidiary airlines and service companies in African and Asian countries such as Burkina Faso, Gambia, Indonesia, and Mali. (For a list of such entities, see table 1; note that the names of entities in Burkina Faso and Mali are unknown and therefore not included in the table, though the existence of Mahan front entities in these countries is confirmed by the company’s use of sham aircraft registration codes from these jurisdictions.) With financial support from the IRGC and other regime organs, Mahan aims to expand its activities in Europe using these subsidiaries as well as codeshare agreements with other airlines.

Iran’s European Flights: Sanctions and Loopholes

On November 5, 2018, the U.S. government reimposed full sanctions on the Iranian regime as part of an unprecedented economic pressure campaign. Many of these sanctions remain in place today and have made it difficult for Iran Air to buy fuel and other services overseas, while mismanagement and lack of financing prevented it from adding newer jets to its fleet. As a result, the company now has only five wide-body aircraft with sufficient fuel capacity and technical upkeep to conduct flights to Europe.

As this problem worsened over the years, the regime began giving Mahan the opportunity to acquire secondhand A340 wide-body aircraft and establish European routes as early as 2012, using a variety of illicit methods to circumvent U.S. sanctions placed on the airline in 2011. The JCPOA temporarily suspended these sanctions, but once they came back into force in 2018, Washington pressed its allies in France, Germany, Italy, and Spain to ban Mahan flights in 2019, once again making Iran Air the only Iranian carrier permitted to operate within European airspace.

Today, most Iranian travelers to Europe and beyond rely on foreign carriers, especially Turkish Airlines, Qatar Airways, and, to a lesser extent, Emirates. If the European Union decides to sanction Iran Air, these and other airlines would likely begin transporting passengers from Iran to Europe under codeshare agreements with Tehran. Iranian authorities have even studied the possibility of contracting foreign airlines to undertake domestic flights inside Iran in case a significant portion of its fleet goes out of service.

In the meantime, Mahan Air has been working steadily to circumvent European sanctions and restrictions since 2019. For example, it established subsidiaries such as Yazd Airways to undertake European flights in the near future. It has also leased its Airbus A300-600 and A310-300 wide-body aircraft to Iran Airtour, a “privately owned” Iranian company that obtained its third-country operators authorization from the European Union Aviation Safety Agency (EASA) in December 2021. Iran Airtour was placed on the U.S. Treasury Department’s Specially Designated Nationals list between 2011 and 2016 for providing support to terrorists, but it has not been put back on that list despite the reinstatement of relevant U.S. sanctions in 2018.

For the past two years, several new Mahan Air subsidiaries have managed to remain below the Treasury Department’s radar, enabling them to expand their operations rapidly and receive more aircraft from their parent company. Because Mahan now aspires to resume European operations in full, the airline and its affiliates should be targeted in any new sanctions and flight bans. Although a European ban on Iran Air would represent a positive collective response if Tehran transfers ballistic missiles to Russia, it would not do anything to curtail Mahan’s illicit activities, which include transferring arms, mercenaries, and IRGC personnel across the region and around the world.

In fact, sanctioning just Iran Air would likely encourage the IRGC and Mahan to double down on using offshoot airlines and codeshare agreements to expand their operations in Europe. The EU and its allies should therefore sanction Mahan as well, while simultaneously persuading international airlines that have close ties with Iran to shy away from any lucrative propositions Tehran might make regarding domestic market shares or other codeshare arrangements.

Notably, the goal of such measures is not to pressure Iran’s travel and tourism sectors, since the regime reaps miniscule economic revenue from Iran Air and is ideologically indifferent to how such pressure affects the citizenry. Rather, the main goal is to curtail Mahan Air’s strategic role as a worldwide logistical workhouse and gap-filler for the regime. To reach that goal, new rounds of sanctions should focus on the following targets:

Mahan Air
Mahan subsidiaries (see table 1 for examples)
All Mahan aircraft, including those leased to other Iranian and foreign airlines
IRGC and Iranian government officials who benefit from the activities of Mahan and its subsidiaries.

By taking this broader approach, the EU and its allies can prevent Tehran from turning sanctions against Iran Air into an opportunity to further obfuscate its network of illicit activities and affiliates inside Europe.

Source » washingtoninstitute