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Replacing Mahan Air: Iran’s Aviation Procurement Scheme Via Armenia Airways

06/29/20 8 minute read

An Armenian airline facilitated the purchase and transfer of multiple aircraft containing U.S.-manufactured components and parts to Iran, according to public records. These transfers could be in violation of U.S. export control regulations.

Since 2019, Armenia Airways has sent at least two Airbus A310s to Iran Airtour — an Iranian airline with alleged ties to sanctioned airline Mahan Air — according to public records and aircraft tracking data. Iran Airtour itself was previously sanctioned by the U.S. Treasury’s Office of Foreign Assets Control (OFAC) in 2011, but was not relisted after the signing of the Joint Comprehensive Plan of Action (JCPOA) in 2016 or the subsequent U.S. withdrawal from it.

The aircraft procurement scheme was first mentioned in Persian-language media in April, but it has not yet gained international attention.

Despite sanctions against several Iranian airlines, open-source information and public records reveal that Iran is still able to repair and replace its aging fleet via non-sanctioned airlines, such as Iran Airtour. By obscuring its procurement network through intermediaries, Armenia Airways has enabled Iran Airtour to acquire several aircraft known to contain U.S.-manufactured components and parts.

Armenia Airways under Davudyan

In 2018, Armenian-Iranian Arlen Davudyan-Zarna became the new owner and director of Armenia Airways. Prior to this new role, Davudyan had worked for two sanctioned Iranian airlines — Mahan Air and Caspian Airlines. His previous relationships with these two carriers likely paved the way for Armenia Airways’ relationship with Iran Airtour.

Davudyan was also the founder of three tourism and transportation services companies with ties to Iran: Tatev Travel Agency (suspended), Royal Express Tour (suspended), and Savetrans LLC (dissolved). Tatev Travel Agency was the former General Sales Agent (GSA) for Mahan Air and continues to act as the GSA for Iran Aseman Airlines, according to the company’s website. Additionally, both Royal Express Tour and Sewtrans LLC list Iranian co-founders in Armenia’s Unified State Registry.

In addition to these industry connections, Davudyan continued to expand his business relationship with Iran after acquiring Armenia Airways in 2018.

In June 2018, Armenia Airways sold its Diamond DA40 aircraft (EK-225) and took out a loan from an Armenian bank to fund the purchase of two Airbus A310-300s (EK-31001 and EK 31002) — collectively worth $5.48 million — from the Romanian airline TAROM. Additionally, we found that Armenia Airways imported various aircraft parts worth nearly $370,000 later that year, according to the Armenian Legal Information System.

In February 2019, Armenia Airways also purchased a British Aerospace 146-300 (EK-14601) aircraft from Aviro Air, another Romanian airline. This aircraft began flights between Yerevan and Tehran in June 2019. Notably, this is the only available Armenian airliner providing flights to and from Iran after Mahan Air left the Armenian market in 2019. However, the plane has been grounded since March 2020 due to the COVID-19 global pandemic.

Fig. 1: Armenian Aircraft Registry lists the British Aerospace 146-300 (EK-14601) as the sole aircraft in Armenia Airways’ fleet as of Apr 8, 2020

Davudyan has also signaled a desire to expand his company’s business beyond the Middle East. In a June 2019 interview with Sputnik Armenia, Davudyan expressed interest in extending Armenia Airways’ flights to Russia, China, and the U.S. in the long term once the company obtains aircraft capable of long-distance flights.

How Iran Airtour acquired aircraft from Armenia Airways

Due to alleged technical issues with the two A310-300s in Armenia Airways’ fleet, both aircraft were sent to Tehran Mehrabad International Airport for repairs in August 2018 — only two months after they were purchased. Last month, Iranian media outlets reported that the two aircraft are operational and will soon be incorporated into Iran Airtour’s fleet.

Due to Davudyan’s close ties with sanctioned Iranian airlines and the suspicious transfer of the aircraft to Iran, it is possible that the two aircraft were purchased in a deliberate effort to transfer ownership to Iran Airtour from the beginning.

Although the A310-300 is manufactured by Airbus, a European company, many of its components and technology are made in the U.S. and are therefore subject to U.S. export control regulations. As such, Armenia Airways could be violating the Iranian Transactions and Sanctions Regulations (ITSR) by knowingly exporting foreign aircraft containing more than 10 percent of U.S.-controlled content to Iran.

While we could not find the proof of purchase between Armenia Airways and Iran Airtour, we discovered that both planes — EK-31001 and EK-31002 — were deregistered from the Armenian Civil Aviation Committee’s Aircraft Registry on Oct. 8 and May 27, 2019, respectively. The transfer of at least one of these aircraft to Iran is further supported by the photo below (See Fig. 2), which depicts the repainting of an A310-300 for Iran Airtour’s fleet. Aggregated aviation data shows that Iran Airtour is currently storing both aircraft and is due to enter them into service at some point in the future.

Fig. 2: Armenia Airways’ former Airbus A310-300 (EK-31001) in the repainting process

Iran Airtour: The new Mahan Air?

Mahan Air first gained notoriety for its support of the IRGC and has since faced stringent U.S. sanctions and isolation from European markets. However, smaller and lesser-known Iranian airlines, such as Iran Airtour, have managed to successfully circumvent U.S. efforts to prevent Iran from incorporating more civilian aircraft into its fleet. One Iranian media outlet has even suggested that Mahan Air and Iran Airtour are quietly merging their fleets together, with some Mahan Air employees allegedly switching their uniforms for Iran Airtour uniforms.

So far, we confirmed that Iran Airtour has already purchased four Airbus A300-600 aircraft from Mahan Air in just the past year and plans to acquire more in the near future.

Iran Airtour’s rapid acquisition of former Mahan aircraft suggests that it could become a new player in Iran’s illicit aviation procurement schemes by taking advantage of its inconspicuous status as a non-sanctioned entity.

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