UAE is a big spender in Washington on Iran Sanctions (Here’s why): Tehran would be a significantly better global air hub than Dubai

AVIATION geeks love Iran Air, but for all the wrong reasons. Decades of sanctions have left Iran’s flag-carrier with one of the oldest fleets in the world, featuring museum-vintage aircraft like a 39-year-old Boeing 747SP, the only passenger aircraft of its type still in service. Blocked from ordering Western-built jets for three decades, Iran Air and the country’s 15 other carriers have extended the lives of their obsolete planes while scouring the black market for second-hand ones. The results are predictable: 37 crashes of Iranian aircraft since the turn of the century, claiming more than 900 lives.

Contrary to popular perception, the UAE has repeatedly outspent Saudi Arabia when it comes to lobbying money in the United States. In 2017, the UAE government spent over $21 million as compared to Saudi Arabia’s roughly $14 million—a gap that persisted in 2018 as well.

For readers who may not know the background, UAE sits on large oil and natural gas deposits, and has channeled its wealth into the Abu Dhabi Investment Authority—a sovereign wealth fund valued at 828 billion dollars, the third largest in the world—and two other funds that are each valued at over 300 billion dollars. These sovereign wealth funds have invested in countries around the world, from buying Manchester City football club in England to purchasing Indian airports and European and American real estate.

The money has bought them interesting friends on both sides of the aisle in Washington, as well as in other capitals around the world. According to FARA registration, David Rothkopf, the former editor of Foreign Policy magazine and a former Clinton administration official, is being paid $50,000 a month by the UAE for media advice—a relationship that was initially not disclosed in his opinion pieces or television appearances discussing Middle East politics. The UAE has given money to the Center for American Progress, the think tank that was started by John Podesta, President Bill Clinton’s chief of staff, and which maintained links to Hillary Clinton’s campaign. The DCCC received bundled money from a lobbyist for the UAE in the first quarter of 2019 while House Democrats were unified in voting to pull U.S. military support for the war in Yemen. The UAE and its representatives have also looked to Republican and now Trump administration-tied figures like Elliott Broidy, former deputy finance chair of the RNC, and former Blackwater CEO Erik Prince, for influence.

UAE’s influence over U.S. policy was evident in President Obama’s administration, too. According to New York Times’ Cairo bureau chief David Kirkpatrick, President Obama learned ahead of time of the planned coup, organized and paid for by Saudi Arabia and the UAE against Egyptian President Mohammed Morsi, but adopted a hands-off approach, while some in his administration gave a green light to the Egyptian military and their backers. The Egyptian coup to install Sisi, widely regarded as part of a popular revolution, encouraged the UAE in its attempts to influence the rest of Arab world, from joining Mohammed Bin Salman’s war in Yemen to supporting and providing public relations in his muscular rise to power in Saudi Arabia.

Not surprisingly, with the impending end of the Trump regime, UAE is working hard to find new friends and allies to supplant its client state relationship with the U.S. And, in comes Israel!

But why does the UAE need so much political influence?

Well, if Iran opens up, there is likely to be a huge economic battle between the UAE and Iran for dominance of the skies over the Persian Gulf, but more importantly as a major global air hub in the future.

Tehran, and by the way Tabriz and Mashad (two other major cities in Northern Iran) are fully 2000 kilometers closer to New York, 1000 Kilometers closer to London, Beijing, Tokyo … you name it. Basically, changing planes or switching cargo in Tehran would shave off 20% from most intercontinental air transportation costs. This is significant. This is very important.

In addition to the inherently reduced flying distances, Iran has one of the largest per capita numbers of STEM graduates (i.e., a huge number of qualified air technicians, pilots etc.) and very low operating costs for air services (such as food preparation, hospitality etc.).  By contrast UAE human resources are currently reported to be too few, with many other issues such as being seriously overweight, lazy and poorly educated. Anyone operating in Dubai, must do so with imported labor from Philippines, Bangladesh etc. This is a critical issue. And thus, there is no competition. In a new world without sanctions on Iran, Tehran would dominate.

In effect, an Iranian hub would put Dubai out of business. Multiple Iranian hubs would put a serious dent into other regional hubs too.

If sanctions are lifted on Iran, it is likely that Iranian airlines would place huge ($30 Billion dollars +) in new orders for planes immediately. This would provide serious competition to UAE’s flagship airlines Emirates, Etihad etc. And many other airlines, would reposition to make Tehran their regional transit point between East and West rivaling Dubai!

These UAE carriers know it. And by the way, they are backed by UAE’s ruling families. And it is a political and economic risk to Iran’s neighbors.

The issue goes far beyond, airports and airlines. Iranians have by passed sanctions by using third party entities in the UAE to conduct transactions. UAE has literally made a fortune off Iran’s back for over 40 years. In fact, because there are no direct flights from North America to Iran, millions of expat Iranians often travel via Dubai to Tehran to see their families.

But now the game could end. To ignore the implications of the Islamic Republic’s emergence from isolation would be a big mistake. Everyone in the air industry knows these fundamental facts.

“Certainly, this is our historical position: we have always been a center for communications in the region,” Iran’s Transport Minister Abbas Akhouni said in an interview.

“We used to be a very important airline in the region and globally, so of course we want to play our role fully once again,” Iranair Chairman Farhad Parvaresh told Reuters.

Iran signed a deal for 118 Airbus jets, and contracts to expand the main Tehran airport, during a visit to Europe by President Hassan Rouhani, less than two weeks after sanctions were lifted in exchange for curbs on Iran’s atomic program in 2016. This was summarily stopped when Trump came to office.

Right now, UAE’s carriers dominate long-haul travel globally, thanks to smart, efficient hubs and a strategic position that places two thirds of the world’s population within an optimal 4-8 hours’ flying time from Dubai, home to regional heavyweight Emirates. And their only serious regional competitor is Turkish Airlines.

But Iran could force a share of these spoils in the future.

“(Iranair’s) obvious intention is to become part of the network operation that other regional carriers have operated so effectively,” said Peter Harbison, chairman of airline thinktank CAPA, at an aviation meeting in Tehran. “Iran is very well geographically positioned … We are obviously looking a few years out to get to that stage, but it is really where we could be in 10 years’ time.”

But, even before then, it faces a contest to serve its own market as foreign carriers will be eyeing opportunities in the country of 80 million. The International Air Transport Association (IATA), a trade association, has predicted Iran’s domestic market alone, will more than treble from 12 million passengers a year now, mostly domestic flyers, to 44 million by 2034.

“While the airlines here (in Iran) are rebuilding their capacity, the regional carriers … are looking to suck traffic out from other regional airports,” Dick Forsberg, strategy chief at aircraft lessor Avolon, said during the CAPA Iran Aviation Summit.

“It is going to be very hard for the airlines here to recover that leakage in the short- and perhaps even medium-term.” In other words, Iran would be a serious – perhaps existentialist – threat.

With traffic of 6 million passengers a year, right now Tehran’s airport is dwarfed by Dubai’s 78 million. But within a matter of years, Iran could boost capacity in Tehran alone to 45 million on the way to a target of 70 million.

Iran will need to be extra careful and not “fall in the trap that Air India got into,” said CAPA’s Harbison, referring to an influx of foreign capacity before the local champion was ready to compete.

Thus, war with Iran would benefit the Emirates, Not the U.S. Since the US will benefit greatly from massive Iranian aircraft purchases, but the Emirates is strongly pushing for continuation of Iran sanctions in Washington. Add this this, further lobbying with DC legislators and public (via Fox News etc.) alike financed by Saudi influence peddlers and you have a lot of money flying around under the radar to force an anti-Iranian agenda.

Iran is not the only victim of UAE lobbying. In the past few years, President Trump has backed Libyan warlord General Khalifa Haftar in his assault against the United Nations-recognized interim government in Tripoli. The New York Times has reported that the Trump administration is working to label the Muslim Brotherhood, a longstanding pan-Islamic group that has stood in multiple Egyptian elections, a terrorist organization. The administration has also labeled the Iranian Revolutionary Guard a terrorist organization; the first time a foreign government’s military has been so designated by the United States. Former National Security Advisor John Bolton was itching to provoke a war with Iran, claiming that when Iranian-backed groups like the Houthis attack oil pipelines in Saudi Arabia, Iran was effectively threatening U.S. interests.

For the last 4 years, the Trump regime has put a for sale sign on the front lawn of the Whitehouse and peddled US policy in exchange for hard cash. Kushner has found new investors in big real estate projects and Trump has positioned himself so he can access these same pools of cash in his businesses when he leaves Washington. Perhaps I am naive, but such blatant sale of US foreign policy – against US national interests – has never been so evident in the past.

Its time to truly re-evaluate the ‘reasons’ why Iran has become a pariah in Washington. Don’t get me wrong, but I do NOT support the mullahs in Tehran.  But in some ways, the continuation of the regime in Tehran, and the existence of sanctions serves the interests of others (America’s big spending so called Allies) – NOT the US nor Iran.

The UAE is genuinely scared. In an opinion piece published by Al Jazeera this week, they openly agreed, “that thanks to the U.S. shale boom and Middle Eastern oil’s disappearance from the Western powers’ list of priorities, (Persian) Gulf countries are becoming increasingly “vulnerable to Iran.”

It really isn’t rocket science for everyone to appreciate that the US has no real interests in the region and needs to back out of the mess. And that normalizing with Iran is in the US national economic interests. The UAE knows this, and as a result recently normalized relations with Israel – who in turn agreed to provide some security assurances to them. The writing is on the wall.

Let me sign off by saying, I remember fondly, cycling past Tehran’s Intercontinental Hotel and seeing regular fleets of Pan Am air stewards stepping out of minivans in the 70’s. There was a time, when US industry and politicians fully appreciated Iran’s value as a friend, as an ally, as a partner, as a hub.

Its amazing how the truth gets twisted by those with nefarious and self-driven interests… with money to throw around…like these Arabs.

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