What's going on?

Boeing, America�s biggest aircraft manufacturer, said on Tuesday that it had signed a tentative agreement to sell planes to Iran. Earlier this year many international sanctions against Iran were lifted as a result of a diplomatic deal concerning its nuclear program. Well, this could be the biggest deal with an American company since those sanctions were lifted.

What does this mean?

Iran�s state-owned carrier, Iran Air, operates a lot of very old aircraft�(reportedly, of the 250 passenger planes in Iran, 230 have to be replaced). That�s one reason why Iran Air entered into an agreement to buy planes from European aircraft maker Airbus almost immediately upon sanctions being lifted in January.

Iran is seen as a big potential growth area for the industry given its ageing aircraft and the expectation that its economy will grow quickly now that many sanctions have been lifted. Boeing is stepping forward in an effort to catch up with its archrival Airbus and to ensure it doesn�t lose out to other manufacturers.

Why should I care?

The bigger picture: The agreement faces some political opposition in the US. Iran remains deeply unpopular with many US politicians � so expect this deal to create some political noise. However, given that sanctions have been lifted, it�s likely that the US government will prefer that Iran buys planes from a US company (and thus support US jobs) rather than buy its aircraft from suppliers in other countries.

For the stocks: The stock prices of aircraft manufacturers are much less volatile compared to�other industries. Sales, especially of large planes, have slowed considerably versus a few years ago when booming demand from, in particular, Middle Eastern carriers helped drive sales. But the stock prices of Boeing and Airbus don�t oscillate like some hyperactive tech company. The industry�s �barriers to entry� (which refer to how difficult it is for a new competitor to enter the market) are exceedingly high � and so the stock returns tend to be much more stable than in other industries.