Sanctions-hit Iran is taking the unprecedented step of allowing a foreign airline, Qatar Airways, to ply its domestic routes, an Iranian official told the ISNA news agency Sunday.
"The agreements have been done and the time of implementation of this agreement will be announced by the roads and urban development ministry," the deputy minister in that ministry tasked with transport, Shahriar Afandizadeh, was quoted as saying by the ISNA agency.
The deal would see Qatar Airways operate a code-share arrangement with Iranian airlines to comply with laws excluding non-Iranian companies from domestic routes, the CEO of flag-carrier Iran Air, Farhad Parvaresh, told the IRNA news agency.
Iran's airline sector has suffered badly under three decades of US sanctions, which have left a shrinking, dilapidated fleet unable to keep pace with demand.
The country has struggled to purchase new aircraft under the sanctions -- notably US-made Boeings but also European-made Airbus planes, which contain US components -- and has had difficulty in sourcing spare parts and providing necessary maintenance. Purchases of used aircraft have also been limited.
Around 15 serious air accidents over the past decade have killed more than 900 people, prompting authorities in February to start retiring leased Soviet-era Tupolev aircraft, badly reducing capacity.
There also have been a number of near-misses, including an emergency landing this month of an Iran Air flight arriving from Moscow whose landing gear did not fully deploy.
An identical problem forced a similar landing in June on a domestic flight by the country's second-biggest airline, Mahan Air. There were no injuries in either incident.
Iran Air and Mahan Air have fleets of 51 planes and 36 planes, respectively.
The average age of Iranian aircraft in service is 22.5 years, according to figures presented in September by an Iranian lawmaker who calculated investment of five billion dollars was needed to cut the average age to 15 years.
Qatar Airways, which has a fleet of 97 aircraft and orders for 182 more, currently services international routes between the Qatari capital Doha and the Iranian cities of Tehran, Shiraz and Mashhad.
The Qatari company already has code-share agreements with several foreign airlines on international routes, including US carriers United and US Airways.
Afandizadeh said domestic seats sold on the Qatar Airways planes would be 25 per cent more expensive than the ones run by Iranian airlines, partly because the Qatari aircraft would purchase aviation fuel at the market rate of 60 cents a litre rather than the subsidised 33 cents per litre offered to national companies.