Grounded by the Ledger

Humanitarian critics arguing that ground bans hurt regular travelers point to an Istanbul roadside on September 26, where weary passengers hauled luggage from a bus. The National found crowds chose the 2,400-kilometer overland journey from Tehran once airline Mahan Air suspended flights to Turkey.

A listener asked if Treasury Secretary Scott Bessent truly announced every Iranian airline would be shut down worldwide by September 23, how that mechanism works, and where it hits a wall. Today we trace that televised deadline, the banking levers behind it, and why regional flights vanished.

Bessent did issue that televised warning. Appearing on CNBC, the American business news network, on September 21, he reportedly announced that on September 23, “all the Iranian airlines will be shut down around the world.” Enforcement advocates argue foreign airports cannot risk American banking ties. Bessent spelled out the threat for airport managers: “If they land, you cannot provide them with fuel, you cannot provide them with landing services, you cannot sell them tickets, or you will be knocked out of the dollar system.”

The administrative clock started earlier that month, when Treasury reportedly placed 27 Iranian airlines on its sanctions list. To let foreign companies wind down operations, officials issued General License DD, a temporary grace period. Federal records show that authorization ended at 12:01 a.m. on deadline day.

The shutdown struck an active network. Al Jazeera reported that Iranian airlines carried nearly 7.2 million international travelers in 2025, even though departing seats abroad had already plunged 49 percent by August. With regional airports now barring those flights, what made Treasury move forward with this campaign right now?

This latest squeeze grew out of a stalemate. Six months into strikes against Iran, Washington was stuck in limbo—neither war nor peace, as Le Monde put it. So on August 24, 2026, Scott Bessent launched Operation Economic Outcast to cut off Tehran's surviving economic lifelines. Treasury invoked Executive Order 13902 to issue a sectoral determination. In plain terms, that lets the government treat a country's entire civil aviation industry as one big sanctioned target, instead of chasing individual airframes.

American aviation curbs on Tehran date back to November 1979, after the embassy takeover, followed by a 1995 ban on aircraft and spare parts. But sanctioning those 27 airlines at once was unprecedented. As Chatham House's Sanam Vakil warned, cutting off ground services everywhere threatens to become what she called a "blockade of Iran's aviation infrastructure."

The administration argued passenger flights serve as covert military supply lines. Treasury alleged Iran uses commercial planes to move Revolutionary Guard personnel, weapons, sensitive tech, and illicit cash to proxies. To prove it, officials highlighted covert fleet expansion. Commerce Department investigators tracked Boeing 777 jets routed into Iran after stopovers in Indonesia and Cambodia and temporary re-registration in Madagascar. By summer 2026, Treasury alleged Mahan Air picked up at least 3 more Boeing 777 wide-bodies using intermediaries in Oman and the United Arab Emirates.

Customs data told a similar story. The Wall Street Journal reported Chinese vendors sent roughly 1,300 dual-use shipments to Tehran's defense ministry in the first half of the year, followed by over 6 million dollars in drone components. Yet pointing to illicit cargo left an unanswered puzzle: how could Washington force an overseas airport terminal on another continent to strand a commercial jet without enacting any local statute?

American officials never had to step onto a foreign runway or pass local laws abroad to ground those planes. Overseas airports, ground crews, and fueling companies operate entirely beyond direct American legal reach. The pressure relies on secondary sanctions instead. If a foreign bank conducts major business for any of the targeted Iranian airlines, Treasury can restrict or terminate that lender's American correspondent or payable-through accounts. In plain words, a correspondent account is the basic plumbing of international finance: an account an overseas bank maintains at a United States institution to clear greenbacks and settle transactions. Threatening to sever that relationship effectively locks the foreign firm out of global commerce.

Jacob Lew, the former Treasury chief, once noted that the real power of these measures comes from how deeply global commerce depends on American banks. Supporters of the move argue that leverage gives overseas aviation vendors almost no room to breathe. Kerri Bitsoff, a former senior official at OFAC, the Treasury branch that enforces sanctions, explained that Washington's net covers nearly the whole world fleet, since commercial planes depend so thoroughly on American airframes, engines, and navigation systems. As she put it, these designations "force a choice on every fuel supplier, ground handler, and bank that still touches an Iranian airline."

That is the mechanism behind Scott Bessent's televised threat about getting "knocked out of the dollar system." Even if a fueling agreement or handling deal is struck and carried out completely overseas, routing any related dollar payment through an American financial institution risks an enforcement penalty. Faced with that hazard, overseas businesses engage in de-risking: preemptively severing ties with Iranian clients to protect their bottom line long before an investigator in Washington flags the account. Since modern international flight networks cannot survive without access to dollar liquidity, that financial vise forced airports across the region to choose whether to turn Iranian airliners away.

The shock hit regional runways right away. Ahead of the September 23 cutoff, neighboring governments stepped in with air navigation directives. These are formal notices from foreign aviation authorities—not the airlines—meant to insulate local airport businesses from American financial penalties. On September 17, Mahan Air ended its Tehran–Muscat service after Oman's aviation regulator issued instructions. By September 21, the carrier also suspended flights linking Iranian cities to Istanbul and Ankara indefinitely, saying Turkish authorities had ordered the pause.

The ripple effect traveled fast through the Caucasus and into the Gulf. Georgia turned away Iranian carriers on September 21. The next day, Azerbaijan Airlines dropped flights run by Iranian airlines because of Washington's new aviation sanctions. On September 24, the United Arab Emirates suspended every Iranian flight indefinitely.

By Friday, September 25, the restrictions reached Iraqi airports. Aviation authorities grounded Iranian planes at all 4 active commercial airports: Baghdad, Najaf, Erbil, and Sulaimaniya. At Najaf, airport managers confirmed that incoming and outgoing Iranian services paused starting at 2 a.m.

Supporters of the policy argue this chain reaction shows Scott Bessent's warning hit home. From their perspective, once foreign service providers faced being knocked out of the dollar system, no aviation vendor was willing to jeopardize its global business just for landing fees.

On the ground, that pressure landed directly on everyday passengers. Echoing those exhausting bus journeys toward Turkey, booking offices in Najaf froze ticket sales and shifted travelers onto coaches. Pilgrims and patients bound for medical care in Iran had to endure long road trips, where the overland journey from the border to Qom reportedly takes more than 12 hours. Still, that regional wave of cancellations leaves the central question open: Did the secondary sanctions truly halt every international flight?

The financial wall did not block every runway. On September 23, the day the deadline arrived, flight trackers showed a Mahan Air plane from Tehran landing at Guangzhou Baiyun Airport in southern China. It never appeared on the airport's official website, while schedules in Tehran still had a departure lined up for Shanghai.

Beijing pushed back immediately. Chinese Foreign Ministry spokesman Guo Jiakun condemned the measures, saying China rejects illegal unilateral sanctions—penalties imposed by a single country without approval from the UN Security Council—because they carry no weight under international law.

Sanctions skeptics point out that other foreign corridors stayed open too. Tracking data showed at least 6 planes leaving Iran once the rules took hold, flying to cities like Bangkok, Phuket, and Kabul.

Aviation analysts were hardly surprised by that resistance. Saj Ahmad of StrategicAero Research stressed that Iran maintains deep regional ties with neighbors like Pakistan and China, meaning those governments won't "fold like a deck of cards." He openly wondered if overseas airports would actually reject Iranian handling fees, questioning how American officials could ever police those transactions on foreign soil.

Then there is the line Washington cannot cross: Iran's own borders. Because secondary sanctions target foreign companies servicing planes abroad, they have no legal power or practical way to halt domestic passenger routes inside the country, which keep running. Still, even with planes taking off between Iranian cities and a handful of Asian flights continuing, global mobility for ordinary citizens has been thrown into chaos, leading straight into a bitter conflict over who carries the real burden.

That friction cuts straight to a basic disagreement about what this policy really targets. American officials insist that choking off civil aviation is vital since commercial planes double as military cargo haulers. Washington had already blacklisted Mahan Air back in 2011 for moving weapons and fighters, and punished Iran Air in September 2024 over missile shipments to Russia.

Aviation lawyers see something else: a dangerous erosion of basic international standards. Denying airport services collides with the Chicago Convention, the landmark 1944 pact that protects civilian flight safety worldwide. Back in 2007, an International Civil Aviation Organization report warned that cutting off parts and ground help puts ordinary travelers at risk. Iran's envoy to the United Nations, Gholamhossein Darzi, labeled the pressure "economic terrorism" and "collective punishment" aimed at regular citizens trying to move.

That pressure is felt right at the pavement, forcing passengers onto that grueling 2,400-kilometer overland journey. Take the young married couple who showed up at an Istanbul bus station after traveling three days by road just to sit for an English exam that had been called off at home.

With regional flights gone, a return ticket jumped to 2,000 Turkish lira, about 41 dollars—swallowing well over half of an Iranian worker's monthly minimum wage. The husband, wearing a fleece jumper and a tired expression, put it plainly: "We are affected by all this: the economy is terrible, and our Ielts exam was cancelled in Iran so we had to come here to take it instead."

Bessent's warning that foreign handlers would be knocked out of the dollar system swiftly emptied skies across the Gulf and the Caucasus. But that financial weapon stops at Iran's border—domestic flights are still in the air—and sovereign Asian hubs have kept their gates open. As Middle East Institute analyst Alex Vatanka noted, the real question ahead is how firmly Washington insists on enforcement, and how countries around the world choose to respond.

For more on the financial leverage in play, explore secondary sanctions and dollar access. And follow Scott Bessent; we have more stories on him, so you are ready whenever global trade tensions escalate. Thanks for listening. Until next time, this has been Angle.