While foreign airline flights to Iran have practically stopped following the war and regional tensions, the United States has imposed new sanctions on the Iranian aviation sector that may make the return of these flights more complex and difficult, even after the security risks subside.
On September 8, the US Treasury Department announced the imposition of sanctions on 27 Iranian airlines and nine individuals and companies linked to the Iranian aviation sector.
The ministry stressed that, as part of the “economic isolation campaign” against Iran, it targeted “all remaining Iranian airlines.” Several companies, including Mahan Air and Iran Air, were already subject to US sanctions.
At the same time, the United States suspended several licenses related to some flights and aviation services linked to Iran, and warned financial institutions of networks involved in purchasing aircraft and spare parts for Iran.
Turkish Airlines, the national carrier of Turkey, which had previously suspended its flights to and from Iran due to the war, told BBC Persian on September 9 that flight cancellations would remain in effect until March 1, 2027. The company did not explain the reason for the continued suspension.
The announcement of the new sanctions raises questions about whether the new restrictions will make a practical difference, in light of the broad sanctions already imposed.
Will these sanctions close the door to foreign trips to Iran? Will Türkiye, the UAE, or any other country risk exposure to US sanctions by receiving flights operated by sanctioned Iranian airlines?
What did Washington decide?
On September 8, the US Treasury imposed sanctions on 36 entities and companies, including 27 Iranian airlines, including Aseman, ATA, Iran Air, Kish Air, Karon, Qeshm Air, Saha, Sepehran, Tapan, Warsh, and Zagros.
A number of Iranian airlines were included on US sanctions lists. The latest measure expands the scope of sanctions to include all remaining active Iranian airlines.
This measure is based on a US decision issued on August 24 to classify the Iranian aviation sector as one of the sectors of the country’s economy, in which working or conducting transactions related to it could expose individuals and companies to US sanctions.
Following this decision, the Office of Foreign Assets Control of the US Department of the Treasury can also impose sanctions on workers in this sector.
US individuals are prohibited from transacting with sanctioned companies, unless the transaction is exempt or authorized under a license.
The assets of these companies in the United States, or assets owned or controlled by American individuals, are also frozen.
The restriction also applies to companies in which sanctioned individuals own, directly or indirectly, individually or jointly, at least 50 percent.
But the latest US statement of actions is not limited to Iran. At the same time, the United States also imposed sanctions on foreign companies that the Treasury Department said helped Mahan Air transport aircraft, ship cargo, purchase spare parts, or provide commercial representation services.
This includes companies in Türkiye, the UAE, Malaysia, Kazakhstan and the United Kingdom. The US government says that the Turkish company AS System coordinated the transportation of shipments for Mahan Air, which included drone components and industrial equipment, while Miss Cargo provided sales agency services for the company.
Meanwhile, the United Kingdom also announced in the House of Commons on September 8 a new package of sanctions on Iran.
In the aviation sector, Iranian cargo aircraft will be prohibited, with limited exceptions, from landing in the United Kingdom from September 29. This measure does not apply to foreign airlines operating flights to Iran.
The war and the suspension of many flights
The current suspension of foreign travel to Iran began before the new sanctions were imposed. As the war intensified and the state of insecurity escalated in the region’s airspace, airlines faced the risks of airspace closures, sudden changes in flight paths, threats from missiles and drones, high insurance costs, and difficulties in planning fleets of aircraft.
Among the airlines whose flights to Iran have stopped or been suspended are Turkish Airlines, Emirates, Qatar Airways, and Flydubai.
Turkish Airlines' response to BBC Persian on September 9 shows that the suspension of its flights to and from Iran will continue until March 1, 2027.
The company did not say that US sanctions were the reason for canceling its flights. The comment was originally made against the backdrop of war and concerns regarding safety and security. However, new sanctions may become a deciding factor in the next phase, when airlines consider whether to return to Iran.
For this reason, the end or decline of tensions will not necessarily mean the resumption of flights.
In addition to assessing security conditions, airlines will have to ensure that the aircraft they use, payment channels, insurance contracts and airport services do not conflict with US regulations.
What obstacles do sanctions create for the return of foreign flights?
In conjunction with the imposition of sanctions on Iranian airlines, OFAC suspended several licenses that had previously allowed the operation of some foreign flights linked to Iran.
The most important of these was the “J-1 General License,” which allowed, under specific conditions, non-US airlines to fly US-regulated aircraft to Iran, provided that the aircraft did not remain in Iran for more than 72 hours and remained under the control of the foreign company itself. Other licenses also included payments related to the passage of foreign aircraft through Iranian airspace.
The importance of this change is that US regulations do not only apply to aircraft made in the United States. If 10 percent of the aircraft's value consists of goods, components, or technology subject to US regulations, then the aircraft is subject to these regulations as well.
OFAC said aircraft manufactured outside the United States, including older aircraft, may also exceed this percentage. This means that an Airbus plane, for example, is not necessarily outside the scope of these restrictions just because it is made in Europe.
Before the J-1 General License was suspended, non-US airlines could use such aircraft for short stops in Iran under the terms of the license. Now that license is being withdrawn.
As a result, airlines planning to fly to Iran, keep aircraft there, or transit its airspace will have to separately evaluate the aircraft situation, payment channels and contracting parties. Depending on the details of each case, you may need a special license from the US authorities.
After the cancellation of US licenses, foreign companies must terminate their previous contracts with Iranian airlines by September 23. After that, it will not be possible to continue such activities without obtaining a separate license.
The US Treasury Department said requests related to aviation safety would be reviewed on a case-by-case basis.
This approach may be important in preventing aviation safety risks, but does not in itself constitute a general authorization for the resumption of normal commercial flights to Iran.
The repercussions of the decision are not limited to the aircraft themselves.
Every international flight depends on a network of contracts and services, ranging from insurance, refueling and ground services, to transporting goods, selling tickets, money transfers and catering services. In some cases, a foreign airline may also need an agreement with an Iranian airline to transport passengers or cargo.
Since all Iranian airlines are now targeted by sanctions, arrangements such as codeshare ticketing, passenger transportation, commercial representation, or cargo services involving these companies have become more sensitive to foreign parties.
Therefore, even if a foreign airline is operationally and security-wise able to return to Iran, its bank, insurance company, or ground handling, fuel, or freight providers may view continued cooperation as too risky from a sanctions perspective.
Will a foreign airline be subject to sanctions if it operates flights to Iran?
The documents issued on September 8 do not explicitly state that every non-Iranian company will be subject to sanctions simply for operating a passenger flight to Iran.
But the US Treasury Department warned in its statement that companies and individuals who assist Iranian airlines subject to sanctions, ranging from aircraft transportation and cargo services to commercial representation, may face consequences. This warning, along with sanctions on foreign intermediaries, indicates that the United States is seeking to target the operational and financial networks that support Iranian airlines.
In practice, any foreign company will need to determine whether the services it receives in Iran, or the money it pays, directly or indirectly benefit a sanctioned person or entity. The size, nature and frequency of the transaction, as well as the extent to which the parties know the identity of the beneficiary, are also important factors in assessing risk.
The history of sanctions shows that some companies, seeking to avoid potential risks, restrict or suspend cooperation related to air routes to Iran beyond even what is expressly prohibited. This hedging by banks, insurance companies, and service providers has played an important role in enhancing the impact of many US sanctions.
What happens if a sanctioned Iranian airline operates a flight to another country?
Allowing an Iranian aircraft to land in a country or cross its airspace does not necessarily mean that the host country or its companies will automatically become subject to US secondary sanctions.
But an international flight usually requires a wide range of services, from fueling, handling, cargo loading and catering, to maintenance, ticket sales, representation, insurance and financial settlements. Each of these services may have different consequences related to sanctions.
The rules regarding foreign banks are clearer, as the US Treasury Department said that foreign financial institutions that knowingly conduct a “significant” transaction for or on behalf of a sanctioned individual may face restrictions on access to their correspondent or payment accounts in the United States.
For non-financial companies, such as airport service providers or fuel suppliers, a comprehensive and clear list of all permitted and prohibited services has not been published.
But the sanctions imposed on companies that provided Mahan Air with cargo or sales agency services show that continuing to provide significant services to a sanctioned airline could expose the service provider to US measures.
For this reason, companies doing business with Iranian airlines may now more closely scrutinize their counterparties, the nature and value of services, payment channels, aircraft ownership or origin, and any potential link between a transaction and a sanctioned individual.
"Focus on intermediate companies and aircraft spare parts"
But the network stressed that any single “risk indicator” does not in itself prove the presence of illegal or suspicious activity, and that financial institutions must evaluate the totality of the evidence and circumstances surrounding each transaction.
The impact of this alert may extend beyond US banks, as international banks, insurance companies, lessors, and spare parts suppliers may apply more stringent scrutiny to transactions and contracts linked to Iran, to preserve access to the US market and financial system.
Uncertain future
Iranian officials described the new US sanctions as a “repetition of a failed policy.”
Abu Dhar Shiroudi, head of the Iranian Civil Aviation Organization, said that the measures may increase the cost of obtaining spare parts and services, but “Iranian airspace will not stop.”
Ramin Kashif Azhar, CEO of Imam Khomeini Airport City, also said a day after the sanctions were announced that flights at the airport were continuing, and that he had not received any correspondence regarding reducing the number of foreign flights.
In the short term, the war and resulting safety restrictions appear to remain the biggest obstacle to international air travel to Iran.
But the September 8 sanctions may make the return of flights to Iran more difficult.
Even if a foreign airline is prepared to resume flights from a safety perspective, uncertainty among banks, insurance companies or service providers regarding payments, provision of services or use of aircraft in Iran may effectively prevent this.
As for Iranian airlines, the pressure is not limited to the airports to which their flights are headed. The network that makes international travel possible, from selling tickets and transporting goods to supplying fuel and spare parts and transferring money, is now subject to greater scrutiny than ever under sanctions and regulatory requirements.
