Iran says it is studying a plan to create a fund to provide loans to enable domestic businesses to purchase planes.

Maqsood As’adi-Samani, the secretary of the Iranian Aviation and Space Industries Association (IASIA), said on Tuesday that a plan to the same effect has been presented to the relevant authorities.

As’adi-Samani told Fars News Agency that the plan envisages the creation of a bank by the IASIA, stressing that the bank will answer the existing shortfalls in budgets of domestic companies for purchasing planes.

He emphasized that this is a shortcoming that needs to be addressed by the banks and financial institutions “as is customary in other countries”.

“Iran’s aviation companies are unable to provide all the required funds to buy planes by relying on their current revenues,” said As’adi-Samani.

The official further said the establishment of IASIA’s own bank – which he said could be named the Air Transport Development Bank of Iran – can eventually help with the renovation of Iran’s aviation fleet.

He emphasized that the required funds for the proposed bank will be provided from the National Development Fund (NDF) as well as certain related financial facilities.

“The NDF previously provided funds to companies to buy planes through banks but required guarantees above the value of their assets,” As’adi-Samani.

“But this problem has been resolved and the government can now accept planes as guarantees for the loans it pays the companies.”

Iranian officials announced last week that the country plans to place orders with aviation giants Boeing and Airbus to purchase up to 90 planes per year until 2020.

The country says it needs above 400 civilian aircraft worth at least $20 billion in the next decade to renovate its aging fleet.

By Press TV