The Geopolitical Context

Transportation entered the third dimension in the early interwar period, a time marked by an “imperial paradox”:Footnote ¹² On the one hand, imperial rule was expanding globally with the French and British empires reaching their zenith by absorbing former German and Ottoman territories. In the Middle East, for instance, the League of Nations mandated France control over Syria and Lebanon while Britain came to control Palestine, Transjordan, and Iraq. The League of Nations mandate system was designed to prepare Arab populations for self-rule. Under the oversight of a permanent commission based in Geneva, imperial governments were obligated to guide these regions toward independence while retaining control over them for the time being.Footnote ¹³ On the other hand, this expansion of imperial spheres of influence went hand in hand with global disintegration as imperial rule from Ireland to India faced unprecedented opposition, unrest, and growing calls for “self-determination.”Footnote ¹⁴ In this moment of imperial crisis, aircraft innovation held the promise of averting the imminent end of empire. This was particularly evident in Iraq, created by combining the three Ottoman provinces Basra, Baghdad, and Mosul, where the British takeover sparked a revolt in 1920. After suppressing the revolt, Britain reverted to a system of informal rule with an appointed monarch under the authority of a British high commissioner. The Royal Air Force became the enabler of British rule, having used aerial bombing in 1920 and holding military responsibility for the entire country before it was granted independence in 1932.Footnote ¹⁵

But civil aviation, too, was to play an important part in imperial consolidation. After 1918, airlines of different empires took on the task of establishing air routes connecting their home countries with their various colonies and dominions—such as KLM, Pan American Airways, and Air Orient (which was later merged into Air France).Footnote ¹⁶ In Great Britain, the idea of intercontinental aerial links was detailed as early as 1919. Then, a specially appointed committee recommended two major air routes, one to South Africa and one to India. In 1924, Imperial Airways was formed as a private, subsidized airline to establish and operate these two routes.Footnote ¹⁷ Receiving state subsidies was the typical mode of operation for airlines at that time. Because neither air mail nor the few paying passengers could make up for the cost of establishing and running air infrastructure, the British government—as much as any other imperial government—stepped in to finance intercontinental aviation. In 1927, for instance, Imperial Airways received £226,400 from the government.Footnote ¹⁸

Imperial air routes supplemented the existing global networks of shipping lines and telegraph cables. Along the Persian Gulf, the British held key positions in Kuwait, Bahrain, and Qatar, as well as several sheikdoms, commonly called Trucial States. They had entered treaties with the British Empire in the late nineteenth century to maintain their independence against Iranian and Ottoman interference. These arrangements guaranteed the British a naval presence in the Gulf region as well as control over the Trucial States’ foreign affairs.Footnote ¹⁹ Historically, British activities in the region had aimed at protecting shipping lanes by establishing a “cordon sanitaire” around India, as James Onley has argued.Footnote ²⁰ In the interwar period, Imperial Airways’s planned air route to Karachi in Western India was meant to reinforce this position and tie India, the empire’s most important colony, closer to London. Through the dispatch of airmail, and, to a lesser extent, officers and administrators, airplanes were expected to accelerate communication across the imperial sphere and engender economic development. In 1926, the Under-Secretary of State for India, Lord Winterton, thus called India “one of the most vital points in the Empire [air] chain” because “India has a far larger population than all the rest of the Empire combined; she is the largest individual customer of Great Britain.”Footnote ²¹

By then, the airline’s preparations for the new air route were well underway. When establishing the intercontinental route to Karachi, planners faced challenges stemming from both immature technology and the laws governing airspace. Because airplanes in the 1920s could fly only short distances (in today’s terms) and during daylight hours, they could not directly connect two distant places but, like railroads, made many scheduled intermediary stops. Imperial Airways would thus have to fly along a chain of airports to India. However, the airline’s pilots could not unilaterally fly over or land at airfields in foreign countries or colonies: in 1919, the states convening at the Paris Peace Conference had crafted the Convention Relating to the Regulation of Aerial Navigation, the first international convention governing transborder aviation. The signatories established that states maintained absolute sovereignty over their airspace, granting or denying foreign aircraft access as they deemed appropriate. Diplomatic missions were thus forced to approach foreign governments on behalf of their airlines to secure overflight and landing rights.Footnote ²² Outside of Europe, Britain’s projected Empire route would run through Egypt, Palestine, Iraq, Iran, and India and thus almost completely through British-dominated territory. Only with independent Iran were British diplomats required to negotiate access rights so that Imperial Airways could cross its airspace on the way to India.

As an independent state, Iran found itself surrounded by imperial powers: The British to the west, south, and east, and the Russians to the north. Since the nineteenth century, both imperial governments had repeatedly attempted to expand their influence in the country as part of their “Great Game,” the Anglo-Russian rivalry in West and Central Asia. In 1907, they settled their rivalry over Iran by signing a convention that divided the country into two zones of interest, a British zone in the south and a Russian zone in the north, separated by a buffer zone. Not only was Iran’s ruling Qajar dynasty not involved in drafting this agreement, but the country saw severe challenges to its integrity and independence in the aftermath. In 1911, Russian forces violently occupied Tabriz and other cities in the north. In southern Iran, where oil had been discovered, the Anglo-Persian Oil Company held the exclusive right to drill the vast oil fields. During the First World War, Russian and Ottoman forces invaded Iran, while a British-led military group, composed of local recruits, operated in the southern parts of the country.Footnote ²³

After the World War, the Soviet Union, which had succeeded Tsarist Russia in 1917, first reoccupied northern Iran in May 1920. However, the following year, it gave up concessions and renegotiated privileges in a friendship treaty with Iran.Footnote ²⁴ At the same time, Britain’s interest in the Gulf region grew further because of its oil deposits. In 1919, the British government sought to strengthen its dominant position through a secretly negotiated Anglo-Iranian Agreement, which foresaw Britain as the sole supplier of advisors, military equipment, and infrastructure. Even though the agreement was never enacted, violations of sovereignty, combined with the extraction of oil reserves and a British naval presence in the Persian Gulf, appeared to be what Mohammad Gholi Majd has called a “strangulation of Persia.”Footnote ²⁵

In 1921, Colonel Reza Khan seized Tehran in a coup d’état that ended the Qajar dynasty and installed a new regime under his own leadership. In 1925, Khan assumed the Iranian throne and, as the new Shah, became the sole autocratic leader of Iran. His rise to power was initially backed by the British diplomats on the scene, but relations between Iran and the British government quickly grew tense.Footnote ²⁶ Pahlavi’s foreign policy, as Chelsi Mueller has observed, “was strongly influenced by a particularly virulent strain of anti-colonial, nationalist impulses that emerged in Iran in the aftermath of the First World War.”Footnote ²⁷ One way to further disassociate his country from British or Soviet influence was by seeking the support of third-power actors. In the realm of aviation—in line with the broader political and economic German-Iranian rapprochement emerging after the early 1920s—Reza Khan thus turned to the Junkers Flugzeug- und Motorenwerke company from Dessau, Germany.

Third-Power Engagement and Financial Hardship

The Junkers company introduced the world’s first civilian airliner, the F-13, in 1919.Footnote ²⁸ While airplanes were then commonly built of wood and fabric, Junkers was one of the first manufacturers to employ a novel aluminum-copper alloy, Duralumin, in aircraft design. The F-13 type (Figure 1) was a futuristic all-metal, low-wing design with an aerodynamic shape and a four-seat cabin. The company marketed its aircraft worldwide. In 1920, the first F-13s were delivered to the United States and Colombia, where the SCADTA airline employed them in regular service.Footnote ²⁹ To help the market grow, company founder Hugo Junkers and his headquarters conceived their own airline holding company (Junkers Luftverkehr AG) and cofounded a European airline alliance, the Trans-Europa-Union. By the mid-1920s, almost 180 Junkers airplanes were in operation worldwide.Footnote ³⁰ Still, through the years under consideration, the company would repeatedly experience financial hardship, not only because the market demand was small, but also because its airline operations did not receive any subsidies from the German state. Without state funding, however, aviation within Europe was not economically viable given the high costs compared to well-developed railway networks.

Figure 1.

A Junkers F-13 over Tehran, 1925.

Source: ETH Zurich Library, Image Archive, LBS_MH02-02-0088-AL-FL.

Given the absence of subsidies and the competition from railways on the European continent, the company saw its opportunity for profitable operation in regions with weak rail and car infrastructure, particularly outside of Europe. In addition to Asia and Africa, Junkers regarded the Middle East as “particularly suitable for the establishment of air traffic, as the only existing means of transportation is the caravan.”Footnote ³¹ While this assertion was not fully justified with regard to Iran, where motorized trucks were operating between some regions, the managers still believed that the country’s infrastructure was so underdeveloped that a novel means of transportation could attract enough customers. Moreover, they were convinced that in the country’s difficult climatic and topographical conditions, Junkers’s all-metal airplane would showcase its superiority over the wooden structures commonly used in aviation. The latter tended to warp in dry climates while moisture caused their glued surfaces to disintegrate.Footnote ³² By contrast, the F-13 aircraft was particularly suited for flying in these environments because, as Lutz Budraß has underlined, “the low maintenance requirements inherent to the design, resilience to weather conditions, and flight safety, were characteristics that allowed operations in areas with an adverse climate and little developed road networks.”Footnote ³³

Iran was thus a perfect field of operation for the Junkers company, and the first contact was made in 1923. In January of that year, the Soviet government authorized the German company to secretly establish an airplane factory in Fili, near Moscow, to evade restrictions imposed upon Germany by the 1919 Treaty of Versailles.Footnote ³⁴ Together with the factory, the Soviets also granted Junkers a concession to develop and operate a Moscow–Tehran air route.Footnote ³⁵ To study the Iranian airspace, an F-13 airplane was dispatched on a survey flight and arrived in Tehran on 12 April 1923. Upon disembarking, Junkers manager Friedrich Schmidt was for the first time confronted with circumstances that would repeatedly shape the trajectory of aviation in Iran over the next nine years: Despite proclaiming that it would conduct strictly neutral business in the country, Junkers found itself enmeshed in a web of geopolitics. The Russian chargé d’affaires in Tehran immediately realized the symbolic power of the airplane and cast the survey flight as an official Soviet mission. He forbade Schmidt to contact any Iranian official regarding the sale of Junkers aircraft or a future Moscow–Tehran air route.Footnote ³⁶ The Germans were at least able to give a demonstration of their machine to Reza Khan who was then the war minister and de facto ruler of the country.Footnote ³⁷ Impressed by Schmidt’s F-13, Reza Khan considered buying six machines but eventually purchased six French Breguet airplanes instead. Yet, upon arrival, four of them were already in a state of disrepair.Footnote ³⁸ After this disappointing experience, the war ministry purchased two Polikarpov R-1s from the Soviet Union as well as two Junkers F-13s in 1924, promptly deploying one of them as a bomber in a military campaign in western Iran.Footnote ³⁹ That same year, a British Royal Air Force mission stopped for a month in Tehran to showcase its De Havilland aircraft.Footnote ⁴⁰

Despite this competition from Soviet and British air interests, it was the German company that was eventually tasked with bringing civil aviation to Iran. After Schmidt left Tehran, the Russian chargé d’affaires repeatedly approached Reza Khan, who had been serving as prime minister since October 1923, with his own proposals for an air service linking the two countries. However, the Iranian government refused to commission the development of its air infrastructure to Soviet or British actors as it was struggling to emancipate itself from the decade-long grip of both great powers. A German aviation company instead appeared to be an ideal neutral contractor. The prime minister explained this consideration to the new Junkers representative in Tehran, Edmund Jaroljmek. The latter was indeed ready to play the role of a tradesman devoid of ulterior motives and presented his company and its F-13 machines as ideal means for developing air traffic in the country.Footnote ⁴¹ Five F-13 machines were transferred to Tehran in late 1924, and an air route to Baku was tentatively launched in 1925. However, it was closed after a few months in the absence of official Iranian permission and subsidies.Footnote ⁴² Instead of the projected long-distance Moscow–Tehran route, the focus shifted to first establishing a network within Iran. On 9 February 1926, the parliament—being fully subservient to Reza Khan, who had climbed the throne in December 1925 and called himself Reza Shah thereafter—granted the German company the exclusive right to operate three domestic air routes for five years.Footnote ⁴³

The way was clear for Junkers Luftverkehr to negotiate a proper contract with Iran and start operations. Yet, the company headquarters in Germany were now facing grave financial challenges owing to a decrease in sales and the loss-making Fili plant, which closed in 1925. To rescue Germany’s prime aircraft manufacturer, the German Reich became involved with Junkers and acquired two-thirds of its shares.Footnote ⁴⁴ Even then, its financial situation remained strained. By mid-1926 the new board, now dominated by government controllers, seriously considered shutting down the embryonic business venture in Iran.Footnote ⁴⁵ The German envoy in Tehran, Count von der Schulenburg, strongly advised against this step, cautioning Berlin about Reza Shah’s personal involvement. Von der Schulenburg believed that if the company favored by the Shah failed, it might reflect badly on the Shah’s own political capabilities, and he would be enraged at Germany.Footnote ⁴⁶ In January 1927, the German government waived most of the company’s debts and put founder and patriarch Hugo Junkers back in control.Footnote ⁴⁷

Contract negotiations with Iran continued throughout Junkers’s period of financial hardship and concluded on 29 January 1927, thus setting the expiration date for 1932. Tehran was to become the hub of the domestic network, from where routes would run to Bandar Anzali, Bushehr, and a location on the Iraq–Iran border near Khanaqin. The company pledged to carry free mail on every flight. In exchange, it would receive a subsidy of 3 Kran (c. 1.30 Marks) per kilometer flown in the first eighteen months of operation.Footnote ⁴⁸ It is unclear whether the Iranian government was unwilling to pay more subsidies, but it was certainly unable to do so due to its high foreign debts. In any way, it soon transpired that this subsidy was far from sufficient to cover the costs. The airline could not expect adequate backing from its home country because Germany did not have any imperial possessions in Asia, which would have made a passage through Iran necessary, and because the national flag carrier, Luft Hansa, received almost all of the German subsidies. Junkers thus relied on Iranian subsidies, which were, however, significantly lower than those provided by European governments. Luft Hansa, for instance, was paid c. 2.30 Marks per kilometer for its European services. Given that, as was reported from Tehran, Junkers Luftverkehr had to pay its European pilots and mechanics four times more than in Germany, the difference in subsidies between Luft Hansa’s European and Junkers’s Iranian network was tremendous.Footnote ⁴⁹ Moreover, while Junkers was entitled to receive postal revenues of up to 2,000 Toman (c. 8,800 Marks) per month, any revenue exceeding this amount was reserved for the Iranian treasury.

The Iranian government’s reluctance to invest severely affected Junkers’ operations. As per the contract, the company was responsible for constructing the necessary airport facilities on its own. Town administrations made plots available, but without financial support, airfields at most of the scheduled stopping places along the routes remained mere meadows.Footnote ⁵⁰ To reduce costs, the company focused on developing the airport in Tehran. With all air routes terminating there, hangar and maintenance facilities were to be centralized in the capital. The most pressing need was for a proper workshop so that ground crews could conduct their work sheltered from adverse weather conditions, particularly the summer heat. However, such construction was cost-prohibitive during the first year of operation, so proper workshop facilities were not established until 1928 (Figure 2). Given the exposed workplace and the fact that their work was declared as unpaid training, Iranian workers and apprentices often left within weeks of their recruitment.Footnote ⁵¹

Figure 2.

Junkers workshop in Tehran, 1930.

Source: Deutsches Museum, Munich, Photo Collection, 31271.

Notwithstanding the skeleton crew and improvised facilities, weekly services on the Tehran–Qazvin–Bandar Anzali route (c. 300 kilometers) and the Tehran–Hamedan–Kermanshah–Qasr-e Shirin route to the Iraqi border (c. 600 kilometers) began in February and March 1927, respectively, while the third route to Bushehr (c. 1000 kilometers) remained closed. Flying conditions on the route to Bandar Anzali were very difficult due to the strong winds in the Alborz mountains, particularly near Manjil. The route to the Iraqi border was just as difficult because the aircraft crossed the Zagros mountain range at an average cruising altitude of 3,200 to 3,500 meters, with the pilot sitting in an open cockpit. Between the airfield in Hamadan and the next landing site crews and machines had to endure temperature changes of up to 50°C.Footnote ⁵² The five F-13s flew a total of 193,039 kilometers in 1927, carrying 2,812 passengers and 757 kilograms of mail.Footnote ⁵³

While from an operational point of view, Junkers’s first year in Iran was very successful, the financial situation nearly brought the company to its knees. The service to Bandar Anzali was especially unprofitable as, along the route, people continued to send their mail and packages by trucks. As these took two days instead of three hours, they were slower but also 90 percent cheaper and available every day instead of once per week. In addition, the subsidy of 3 Kran granted by the government for every kilometer in the air was not sufficient to cover the operational cost of 5 Kran (c. 2.20 Marks) per kilometer.Footnote ⁵⁴ In the initial phase, the Dessau headquarters thus had to subsidize the Iran branch with 50,000 Marks per month. Although they managed to halve these subsidies for the remainder of 1927, it still posed a significant burden for the struggling headquarters, which had budgeted its worldwide foreign expenditures at only 20,000 Marks per month.Footnote ⁵⁵

To enhance profitability and eventually put the Iran branch on its own feet, the company needed better contract terms. But more than that, Junkers needed access to Europe’s air networks with their comparatively large trade volumes.Footnote ⁵⁶ An air link with Europe was vital not only because of its commercial prospects but also because the Iranian government had made it a central component of the 1927 contract. The company was required to start a service from Tehran to the Iraqi border within its first month of operations and to effect Iran’s inclusion into international networks within the first three months. Because Junkers was not able to fulfill this request in time, the government kept the third route to Bushehr closed until an international service had been established.Footnote ⁵⁷

An international connection was only possible via Baku, in Soviet Azerbaijan, or Baghdad. Junkers first surveyed the Baku route. In November 1927, after having concluded a neutrality pact, the Iranian and Soviet governments signed an air agreement. Junkers simultaneously negotiated a working agreement with the airline Ukrvosduchput, the Ukrainian air traffic company, according to which Junkers airplanes could fly to Baku and Ukrvosduchput to Bandar Anzali.Footnote ⁵⁸ Scheduled weekly services from Tehran to Baku began in February 1928, with each flight taking eight hours. From Baku, mail and passengers could proceed to Moscow on express trains and then be handed over to the airline Deruluft on its service to Berlin, reducing transit times from Tehran to Central Europe from two weeks to as little as three to four days.Footnote ⁵⁹

And yet, the company could hardly be pleased with its new air link. The Russian side insisted that all airplanes crossing the border should be manned with exclusively Russian crews.Footnote ⁶⁰ The local management, however, soon considered the one pilot seconded to Junkers by Ukrvosduchput unfit for the job; after crashing his airplane, he resigned. The Soviet airline could not provide a substitute, but the authorities in Azerbaijan would not accept German pilots flying regularly over their territory. In consequence, in August 1928, only half a year after the route’s inauguration, Junkers had to temporarily suspend the service. Even though the route was revived after a new pilot was hired, company officials considered shutting down the troublesome Soviet link altogether and instead reach Europe via Iraq.Footnote ⁶¹

There, Imperial Airways could provide such an intercontinental connection. The British airline had inaugurated a mail service to Baghdad in January 1927, reducing the delivery time of letters from London to 7.5 days. If Junkers managers were able to obtain permission to land in the Iraqi capital, they believed, regular service would promise “an increased frequency and also an aggregation of mail on this line. This connection would create a link to international tourist transportation.”Footnote ⁶² If the staff in Tehran were able to extend their reach beyond the embryonic domestic route network and tap into international traffic, the German company might survive. But if nothing changed, they would soon need to pull out of Iran altogether.

Airspace Politics amid Diplomatic Tensions

British diplomats in Tehran viewed the German company’s development of air routes in Iran as suspicious and soon came to consider the German activities a threat to Britain’s future air communications.Footnote ⁶³ Imperial Airways’ airplanes on the imminent route to India would have to cross Iranian territory, for which they would need overflight rights. While Junkers’s plans for a domestic route network did not per se interfere with this Empire route, the prospect of an Iranian sky open exclusively to German aircraft certainly did: Junkers’s contract with the Iranian government granted the German company a five-year monopoly on its three domestic air routes, stipulating that foreign airplanes could use these routes only “if they do not engage in commercial transportation of passengers, luggage, or merchandise upon arrival, in the interior of the country, or when leaving it.”Footnote ⁶⁴

The British Foreign Office reasoned that it would still be able to run the London–Karachi route once Iran granted access to its airspace. But the planned route—coming from Iraq, running along Iran’s Persian Gulf coastline, and stopping at the airport in Bushehr—would inevitably overlap with the domestic routes. The Junkers contract could be interpreted as prohibiting foreign airlines from effecting any through traffic. It was not wholly unlikely that British aircraft would be forced to surrender their freight and passengers to Junkers airplanes at the border and pick them up again at the last airport before leaving Iran.Footnote ⁶⁵ The Imperial Airways management suspected that their competitors had pressed for such a deal, and Junkers had, indeed, previously shown ambitions to “sell the concession for this route at a high price to the British.”Footnote ⁶⁶ If the British were ever to fly over Iranian territory, they would need to come to terms with both the Iranian government and its German aviators.

The British Director of Civil Aviation, Sefton Brancker, visited Tehran in September 1925 and negotiated provisional permission for Imperial Airways to fly along the proposed Gulf route, pending approval by the Iranian parliament. However, by 1927, when the airline was ready to inaugurate this service, the parliament still had not ratified the agreement.Footnote ⁶⁷ In mid-March 1927, Iran invoked its sovereignty over its airspace and informed the British legation that the requested route along the Persian Gulf could not be granted.Footnote ⁶⁸ This created a missing link in Britain’s intercontinental air route to India. Suddenly, the tenacity of the one independent state along the Empire route put the entire project at risk; the planned service had to be postponed indefinitely.Footnote ⁶⁹

The nationalist government under Reza Shah was eager to emancipate the country from British influence. But the tense political relations also provided ample opportunity to revisit the air question in a timely fashion: Iran’s Minister of Court Abdolhossein Teymurtash and British diplomats were simultaneously engaged in a number of negotiations regarding open questions between the countries, such as Iran’s claims to various Persian Gulf islands.Footnote ⁷⁰ Another diplomatic question concerned the capitulatory regime that had granted extraterritorial jurisdiction as well as low taxes and customs rates to nationals of Russia, Britain, France, and the United States among other countries, since the nineteenth century. After Russia had already signed a new agreement in 1921, Reza Shah was eager to also overturn the unequal relationship with Britain and declared he would revoke the capitulations as of May 1928, inviting the British government to negotiate a new agreement.Footnote ⁷¹ The abundance of British commercial interests, including those of the Anglo-Persian Oil Company, put Iran into a strong negotiating position. If we follow Ramazani, the Iranian government also used the air question as leverage to pressure Britain to accept a suspension of the capitulations.Footnote ⁷² Accordingly, when Britain and Iran concluded a new commercial agreement in May 1928, Iran also announced that it would reassess overflight rights.Footnote ⁷³

One month later, Imperial Airways’ general director George Woods Humphrey met Teymurtash, the Minister of Court, in Tehran.Footnote ⁷⁴ The Iranian minister unilaterally offered an arrangement for a maximum of three years, beginning in 1929: The airline would be allowed to make scheduled stops at the airports of Bushehr, Bandar Lengeh, and Jask on its way to India. However, he emphasized that it was to be understood as only an experimental agreement that also obliged the airline to study a possible replacement route across the mountain ranges of central Iran. The agreement was not renewable, and after three years the company would either shift from the Gulf route to the overland route or else cease operations. Nevertheless, since this arrangement would enable the British to eventually commence their work and retain hope of getting back to the negotiating table in the future, they ultimately accepted it.Footnote ⁷⁵ In December, the Iranian parliament passed an air navigation bill.Footnote ⁷⁶

Iran thus allowed the British to launch an air service. However, its specific implementation was determined by security concerns and fitted into Reza Shah’s broader struggle to protect his country against foreign interference. The Iranian government was afraid that, once the country had been opened to commercial air traffic, it would be impossible to prevent aircraft incursion or control foreign ground crews, exposing Iran to a possible British military strike. This was especially true for the southern regions through which Imperial Airways planned its route as they were far from the administrative center and hard to monitor. These concerns were justified not only because of the difficult shared history outlined in the first section of this article and because of Iran’s bitter experience with being invaded during the First World War, but also because the British Empire intended its civil air routes to serve as military infrastructure for the Royal Air Force, if necessary. Moreover, airspace intrusions had already occurred in December 1920, when the Royal Air Force carried out its first flights between Iraq and India along the Iranian coast and had even constructed landing fields on Iranian soil, all without seeking authorization.Footnote ⁷⁷ To prevent this from happening again, Reza Shah’s government sought to keep British air traffic as far away as possible from the littoral of the Persian Gulf once the initial concession expired after three years.Footnote ⁷⁸

But even the overland route offered as an alternative was a mere bluff. The Iranian prime minister confidentially informed Junkers representative Jaroljmek that he hoped Imperial Airways would reject the offer, as he did not wish for British aircraft to fly on this route, either.Footnote ⁷⁹ It was clear that the British de Havilland DH 66 aircraft were designed for international long-distance transport and could not fly at the necessary altitude with any profitable payload. The requested overland route was thus not a result of Iran’s desire to enhance its air infrastructure or get the capital connected to a growing global network. Rather, it was a mere smokescreen. Facilitated air connections were simply not worth the risk of further intrusion into the national territory. Therefore, despite having agreed to provide Imperial Airways with the necessary ground facilities along the prospective overland route, the government did nothing to develop landing strips or hangars after 1928, making it impossible for the British airline to seriously consider flying there.Footnote ⁸⁰ Iran expected Imperial Airways to withdraw from the country once the three-year term had expired.

From Airline Rivalry to Mutual Reliance

During the negotiations between Teymurtash and Imperial Airways in June 1928, the Junkers company had an ambivalent stance towards Iran’s persistence against British demands. On the one hand, forcing international traffic onto an overland route was not in the company’s interest, even though the route proposed to Imperial Airways did not overlap with Junkers’s routes.Footnote ⁸¹ Not only was it important to retain the monopoly serving the small domestic demand for swift air transportation, but Junkers could, in fact, increase its revenues if foreign aviation were allowed to fly regularly on the Persian Gulf route. The German company had been operating without financial aid from Dessau since January 1928, and Iran’s subsidies were to end in August. Meanwhile, the airplanes continued to grapple with low demand, only achieving 30 percent occupancy. These gaps could be filled with Imperial Airways’ future traffic: Junkers aircraft could pick up mail and passengers arriving from Europe or India at airports in Iran and distribute them along the domestic network.Footnote ⁸²

On the other hand, there was a lot to be gained from tough negotiations between Iran and Imperial Airways: through its contract, Junkers held the key to vast parts of the country’s airspace and could—as Imperial Airways’ general director Woods Humphrey suspected—demand that the British airline hand over all freight while transiting the country. Accordingly, the British arrangement with Teymurtash had to contain at least one advantage that would satisfy the Germans enough to prevent them from insisting on their monopoly right—the “high price” referred to earlier: access to the airspace of neighboring Iraq and thus an airlink with Europe’s growing network of air routes.

Junkers in Iraq was in the same position as Imperial Airways in Iran: It needed to apply for permission to enter the airspace. The British had granted Iraq limited self-governance but retained control in foreign and military matters. Accordingly, landing rights for Baghdad were administered in London. As early as 1925, driven by Britain’s air interest in the Middle East, Junkers manager Edmund Jaroljmek had made presentations at the Air Ministry to discuss the issue with civil aviation director Sefton Brancker. The British authorities, however, were strongly disinclined to allow foreign airplanes to fly regularly to Baghdad, and Brancker exhorted Jaroljmek “to avoid raising delicate questions of this kind.”Footnote ⁸³ What stood against Junkers’s appeal for landing rights in Baghdad was the strained diplomatic relations between Iran, Iraq, and Great Britain. Iran argued over the correct demarcation of the border between the two countries, a conflict that was only resolved later, in 1929. The British High Commissioner in Baghdad made it quite clear that this unresolved issue was a significant obstacle to granting the concession.Footnote ⁸⁴ In March 1927, Jaroljmek traveled to Baghdad to debate the matter with the High Commissioner, emphasizing what he regarded as a neutral stance in the Anglo-Iranian conflict: “The Junkers company is a German commercial enterprise that has no interest in politics and cannot be held liable for the attitude of the Persian government.” The British official responded that Imperial Airways was the exact same type of apolitical enterprise and yet had been refused overflight rights in Iran.Footnote ⁸⁵

This shows that the fates of both companies had become interwoven. Junkers was in dire need of Imperial Airways’ European traffic and the British Air Ministry soon realized that access rights might work as a quid pro quo. The ministry considered offering Junkers permission to at least fly to the Iraqi town of Khanaqin close to the border and assured the Junkers headquarters that it was prepared to grant them landing rights if they convinced the Iranians to sanction the Gulf route. Still, the Air Ministry remained clear that access to the airport in Baghdad would not be granted.Footnote ⁸⁶ One year later, the 1928 deliberations between Imperial Airways and the Iranian government afforded Junkers a perfect opportunity to reopen the case. Minister Teymurtash made it an explicit condition that Junkers receive access to Baghdad in return for overflight rights, and the British conceded. Following the agreement, the postal authorities of Iraq and Iran signed a treaty that allowed airplanes to carry mail across the border.Footnote ⁸⁷

Once these questions were settled, the long-anticipated air services could finally start. The first Imperial Airways airplane on the Empire route arrived in Karachi, India on 6 April 1929. Ironically, the journey from London was still not fully airborne because Italy had closed its airspace to Imperial Airways. Accordingly, its passengers had to cross Italy by rail.Footnote ⁸⁸ That same month, Junkers took up its service to Baghdad. There, its arrival and departure times were synchronized with the schedules of Imperial Airways so that Junkers passengers could transfer to airplanes to Europe without too much layover time.Footnote ⁸⁹ Junkers’s business developed well after the opening of the Tehran–Baghdad route. Restrictions on postal revenues were lifted in early 1929, leading to a more than twofold increase in Junkers’s earnings.Footnote ⁹⁰ The Tehran–Bushehr service, opened in 1928, particularly picked up pace as Junkers flights carried mail to and from the new stopping place of Imperial Airways’ India route. Frequency on this line, as well as on the Tehran–Baghdad line, was increased to two services per week. In May, an additional route from Tehran to Mashhad near the Afghan border was inaugurated (Figure 3). The new services doubled the monthly kilometers flown.Footnote ⁹¹ To handle this increase, the fleet—consisting of four F-13s (one of them leased to the Anglo-Persian Oil Company) and one W-33 type airplane—was expanded by three W-33s in 1929. The Dessau factory had introduced this aircraft type in 1926 and in 1927 the first W-33 had arrived in Iran laden with vaccines from Germany to combat a Cholera outbreak.Footnote ⁹² The amount of mail carried by company aircraft quadrupled from 1928 to 1929.Footnote ⁹³ Even the British legation praised Junkers’s service for its safety and reliability.Footnote ⁹⁴

Figure 3.

Air routes of Junkers Luftverkehr (solid) and Imperial Airways (dotted), 1929.

Source: Adapted from “Der persische Luftverkehr im Jahre 1929,” Junkers-Nachrichten, 2 (1930), 37.

Political Intransigence and Contract Expiration

By the start of the 1930s, despite financial hardship and adverse political conditions, Junkers had managed to establish a domestic network spanning about 2,800 kilometers across four routes, two of which offered access to international hubs. Imperial Airways meanwhile carried more than 2,000 passengers between Egypt and India within its first year of operation. After many years of scheming, both companies could finally focus on flying. And yet, both were keenly aware that their lines were already on the verge of termination because both their concessions were set to expire by 1932.

Although Junkers was optimistic about renewing its contract, company officials knew it required revised terms to ensure the financial sustainability of its operations. The Dessau headquarters were again in severe difficulties. In the fiscal year 1929/30, the company lost 4.5 million Marks because less than half of the 118 airplanes manufactured were sold worldwide.Footnote ⁹⁵ There was no demand for its increasingly outdated yet expensive aircraft designs. Junkers, for instance, made an offer to Reza Shah to equip his entire air force with almost sixty airplanes, but the army eventually purchased only two W-33s.Footnote ⁹⁶ The civil aviation branch in Iran was facing similar hardship, the worldwide economic crisis following the stock market crash of 1929 having hit the country hard. With the decline in national trade volumes, the utilization of Junkers aircraft dropped by 50 percent. According to managing director Kurt Weil, even when revenues in Iran reached one million Marks in 1930, the company still lost approximately 125,000 Marks.Footnote ⁹⁷ Any new concession would have to offset these losses. The management expected the Iranian government to pay a subsidy of 5 Kran (c. 2.20 Marks) per kilometer as well as a minimum guarantee of 40 kilograms of mail per flight, meaning that the government would pay for this amount whether or not the airplanes actually carried that much mail.Footnote ⁹⁸

The Iranian government, although financially extremely constrained, was prepared to enter negotiations but identified one major prerequisite: the German company must establish an aviation school for Iranian pilots and mechanics. The Iranians saw aviation as a crucial contribution to their own modernization project, particularly that of the armed forces. Reza Shah had founded a military academy in 1923, and in 1924 the first Iranian military pilots were sent to France for training.Footnote ⁹⁹ Junkers was contracted not only to establish air routes but also to bring expertise and skills that were previously unavailable. From his initial discussions with Junkers’s management, Reza Shah identified knowledge transfer as one of the most important aspects of the company’s engagement in his country.Footnote ¹⁰⁰ Accordingly, Article 36 of the 1927 contract had stipulated that Junkers was to set up an aviation school and provide all aircraft and teaching materials at its own expense, “within the limits of the sums that the government would contribute from its general budget to the expenses and maintenance of this school.”Footnote ¹⁰¹ Junkers Luftverkehr was to establish the aviation school, Iran to pay for its upkeep—or so the Germans thought.

By 1930, three years into the contract, neither side had done anything to establish the school. The Junkers management interpreted the future school as a purely civilian institution, while the Iranian military intended to use it to train air force pilots. Further discussions between both parties bore no fruit.Footnote ¹⁰² On 13 July 1930, Minister of Court Teymurtash summoned Weil to his office. During the three-hour examination, a second rupture became apparent: who was to pay for what? Teymurtash explained that, according to his interpretation of the contract, the government would indeed cover the operating expenses, but these did not include replacement aircraft or even repair or insurance costs.Footnote ¹⁰³

Without funds, progress on the aviation school stalled, and thus the negotiations regarding a new concession for Junkers stalled as well. As the existing contract’s expiration date in late January 1932 loomed closer, it remained unclear whether the company would still be allowed to operate air routes in the future, and whether it was to receive any Iranian subsidies. Weil was convinced that the Iranian government was gambling in the hope of striking a better deal at the last minute. To exert pressure, he took bold actions in October 1931: He ordered his staff to partially shut down operations, terminated all employees’ contracts with three months’ notice, and began to remove equipment. Seeing this step as a way to discourage Iran from playing with fire, he expected in response increased efforts to rescue domestic aviation. However, the company and the government failed to reach a new agreement. The suspension of the service to Mashhad, an important pilgrimage city, further alienated the two parties, and, in general, the German-Iranian relations were at a low due to anti-Shah agitations in the German press.Footnote ¹⁰⁴ Through February 1932, the remaining skeleton crew kept operating, but after that they were summoned back to Germany.Footnote ¹⁰⁵ By March, the parent company was on the brink of collapse and suspended all payments. On 26 March 1932, Junkers Luftverkehr ceased operations in Iran.Footnote ¹⁰⁶ Kurt Weil estimated its total losses within the country at 2.5 million Marks.Footnote ¹⁰⁷

Imperial Airways’ situation in the country was not any better. The arrangement of 1928 had given the British some breathing space. By 1931, however, they could see the writing on the wall. Anticipating the three-year agreement’s impeding expiration, Imperial Airways finally conducted the requested survey along the overland route. The Iranian government set its course from Dezful in the west to Bampur in the southeast, where airplanes could exit the country in the direction of India.Footnote ¹⁰⁸ When the test pilot returned, he reported on harsh winter weather, high mountain ranges, and the absence of serviceable airport facilities. In short, the company board concluded: “it is thought that the Persians selected the worst route they could find and that their desire is to get us out of their country altogether.”Footnote ¹⁰⁹

Because it was impossible to comply with Tehran’s demands, the British prepared to shift the intercontinental route to India in a way that would bypass Iran if necessary. An alternative was a route along the southern shore of the Persian Gulf, through the Trucial States, a part of Britain’s informal empire.Footnote ¹¹⁰ If the section of the Empire air route was transferred to the Trucial States, the route would run all the way from Egypt to India through territory whose governments and administrations had friendly relations with the British, or polities over which the British held sway. However, both the British government and Imperial Airways were very skeptical of moving to the Arabian Peninsula due to various hurdles: Some of the ruling sheiks fiercely resisted the construction of airports in their territories, and the British were uncertain how armed groups in the desert would react in the event of an emergency landing.Footnote ¹¹¹ Most importantly, establishing an air route meant departing from the earlier policy of noninterference in the sheiks’ internal affairs.Footnote ¹¹²

Given these factors, British officials still hoped to be able to renew the agreement with Iran. To increase their chances, they openly threatened to leave the country, believing that “as soon as the Persians realised that we were independent of them, they would prove more accommodating.”Footnote ¹¹³ That is, they applied the same strategy as the Junkers company. Accordingly, the British met with the same Iranian indifference and were only granted a six-month grace period. They intensified their negotiations with the rulers of the Trucial States, eventually receiving flyover and landing rights through, as Chelsi Mueller has remarked, “an unprecedented degree of coercion on the part of the British government.”Footnote ¹¹⁴ In September 1932, Imperial Airways withdrew from Iran, and on 5 October opened its new segment of the Empire route to India, bypassing the country via Bahrein, Sharjah, and Gwadar.Footnote ¹¹⁵ After 1932, two foreign airlines continued to provide international services to Iran, Air Orient and KLM. By contrast, domestic service lapsed after Junkers’s withdrawal because no contractor could be found. In 1935, the Iranian air force decided to establish its own service linking Tehran with Baghdad and Bushehr. Negotiations between Iran and Iraq for overflight rights dragged on for years. It was not until April 1938 that the Ministry of Post and Telegraphy allocated sufficient funds to revive passenger and mail service.Footnote ¹¹⁶

Concluding Remarks

By the time Junkers and Imperial Airways ceased their services in Iran, commercial aviation worldwide had entered a consolidation phase. Major intercontinental air routes had either been recently inaugurated—such as Imperial Airways’ routes to India and South Africa or Pan American Airways’ Miami–Buenos Aires route—or were under development. By the mid-1930s, airplanes connected places as distant as London and Brisbane or San Francisco and Manila. In 1932, a worldwide route network existed that spanned over 286,000 kilometers and served 871,000 people that year. Remarkably, only about 5,500 of these passengers traveled between continents, thus making transport within Europe and the United States the predominant transaction.Footnote ¹¹⁷

But even in Europe and the United States, very few of the many small airlines founded after the First World War had survived the initial period. The world’s first airline to operate scheduled services with a London–Paris run in 1919, Aircraft Transport and Travel, for instance, went into liquidation in 1921. Its successor was later merged with other unprofitable airlines into Imperial Airways. In 1939, this British flag carrier was itself merged into BOAC, today’s British Airways. Air France (1933) was likewise formed from a government-mandated merger of loss-making companies. SCADTA, the first airline to employ Junkers F-13s outside of Europe, was swallowed by Pan American Airways in 1930. The Junkers Flugzeug- und Motorenwerke company itself fell victim to this development. In the wake of its financial crisis of 1925/26, the German Reich requested that the company divest itself of its airline holdings. Operations and equipment were merged with the airline Aero Lloyd to establish a new state-sponsored flag carrier, Deutsche Luft Hansa. The company was allowed to retain its Iran branch, arguably Asia’s first airline, but, as the preceding analysis has shown, Junkers Luftverkehr was incapable of reaching maturity.

The Iranian case study reveals the headwinds pioneering airlines encountered in the earliest phase of the now dominant global passenger transportation industry: Around the world, the performance of airline businesses was crucially shaped by global political dynamics, especially the conflict between imperialism and anti-colonial nationalism as well as the drive for independence. It was also shaped by the novelty of a transportation mode for which international laws and business strategies had yet to be drafted and by the struggle to make civil aviation financially viable. This article set out to investigate how Imperial Airways and Junkers Luftverkehr tackled these challenges, how both airlines dealt with each other, and how the Iranian state dealt with them. The analysis has unveiled the extent to which the activities of both airlines were interwoven. Both were contenders for the small aviation market of the 1920s. Although Junkers arguably needed Imperial Airways more than vice versa, seeking to attach its feeder service to the British intercontinental trunk route, the fate of both companies came to depend on each other. Both failed to implement sustainable air networks, and both grappled with the demands and anxieties of the Iranian state.

Confronted with the new technology at the dawn of the air age, Iran had by no means decided whether to view its potential with enthusiasm or concern. On the one hand, the demand for both an aviation school and the international expansion of the domestic network demonstrates the Iranian government’s drive to enhance global connectivity and close technological gaps. On the other hand, given the country’s history and strong anti-imperial stance, there was also significant concern about foreign interference, informal imperialism, and the threat of an aerial attack. The government in Tehran thought of Imperial Airways as an imperial intruder not to be trusted. These suspicions were partially justified, as became evident when during the Second World War the Soviet Union and Britain jointly invaded the country, citing Iran’s close ties with Germany as their justification.

As a counterweight to British intrusion and investment, Iran increasingly turned to Germany during the interwar decades. Overall, as Ramazani has demonstrated, this “third-power policy that was to assist Iran to free itself from Great Britain and Russia led to heavy dependence on Germany.”Footnote ¹¹⁸ However, while this may be true for trade and investment, a closer look at the airline industry tells a very different story. Junkers was indeed contracted because it appeared to be a neutral partner. The company’s being German and having a technological lead in aircraft design gave it an opening into Iran’s fledging civil aviation sector. Unlike other German businesses operating in the region, however, Junkers Luftverkehr did not bring enough capital to Iran. Like almost every other airline in the world, the company depended on state subsidies to make its operations economically viable. In contrast to the French, British, and Dutch airlines active in the Middle East, however, the Junkers airline did not receive funding from Germany. Junkers thus requested that the Iranian government mitigate its losses. The Iranians, however, expected foreign investment from third-party bidders, rather than taking on the obligation to invest in these ventures. In the words of a British diplomat, “the Persians wanted to have everything on a very grand scale, but were not prepared to put down the money for it.”Footnote ¹¹⁹ As a result, the government kept subsidies extremely tight, skimmed most of the profits, and made Junkers’ Iran branch financially dependent on the almost bankrupt German headquarters.

The analytical focus on company activities and their interactions with the state helps refine our understanding of Iran’s relations with foreign companies. Studying companies as actors with independent agendas and considering their interests provides a fresh perspective on the third-power doctrine and sheds new light on the complexities of the political environment in Reza Shah’s Iran. Junkers Luftverkehr was not simply Iran’s favorite and Imperial Airways was not simply the Germans’ antithetical competitor, as has been argued by previous studies. In fact, Junkers, too, had strong frictions with the state. The Iranian state’s behavior had significant effects on network development, ultimately leading to the grounding of Junkers Luftverkehr and the withdrawal of Imperial Airways. The managers of each airline independently came to consider their own agreement with the Iranian government a “very bad contract” (Junkers) and a “very poor, temporary and unwilling arrangement” (Imperial Airways).Footnote ¹²⁰ Both agreements made it impossible to fly in the political and economic climate of the 1920s. The entangled history of Junkers and Imperial Airways thus provides evidence of the state’s role as either an enabler or a disabler of civil aviation on two levels: the political and the financial.