AIA Reverses Decision: Foreign Travelers to Pay in National Currency for Domestic Flights

Nouraei & Mostafavi Law Offices- 5 July 2022- Tehran- Iran- The Association of Iranian Airlines (AIA) withdrew its decision to charge foreign travelers in dollars for domestic flights, after objections were made by both Ministry of Foreign Affairs, and Ministry of Cultural Heritage, Tourism and Handicrafts which had pointed to its adverse impact on travels for tourism and pilgrimage purposes to Iran.

ISNA news agency had recently quoted AIA Secretary Maghsud As’adi Samani as saying the reason behind the decision was to offer better services to Iranian travelers, arguing that there was no justification to subsidize ticket fares for foreign passengers which the law allocates to Iranian nationals. “The law obliges the government to offer ticket prices at subsidized rate to Iranian citizens. No country offers such incentive to foreign nationals,” Samani had argued, noting that as a company, they are obliged to protect their organizational interests and to keep it operating.

Asked about its likely negative impact on the economy and the aviation industry, on the one hand, and possibly inducing a rate suppression, on the other hand, the Iranian official had said based on the decision, foreign travelers were to be charged $100 for one-hour flights and $150 for longer air travels. He had noted, however, that each airline had the authority to adjust the declared prices. “Some of the airlines have, in fact, announced different price classes for different flights”.

Saying the decision had legal basis, Samani had pointed to destinations such as Mashhad for which the number of foreign travelers had seen a steady rise, saying the objective was to have more seats available for Iranians. “All domestic ticket prices offered to non-Iranian passengers is equal to business class fare. This is while Iranian airlines receive state financial assistance at a dollar rate enough to cover costs of boarding, landing and take-off, parking …, etc. This has put much financial burden on airlines.”

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