Armenia is now the only country in the South Caucasus still letting Iranian airlines fly in. New US sanctions on Iran’s civil aviation sector are testing how long that can last. “We are very transparent with all our partners. We will do our best to ensure that relations remain this way, especially with friendly countries. However, there is a line we cannot cross—that is the risk of Armenia itself becoming subject to sanctions,” Prime Minister Nikol Pashinyan said at a briefing on Oct. 1.

The unilateral US sanctions were announced on Sept. 8 and have been fully in force since Sept. 23, when a wind-down period ended. They threaten any entity providing services to Iranian carriers. Georgia and Azerbaijan have moved to comply with US demands to halt flights to and from Iran, and Armenia is now one of the few countries where Iranian airlines still operate.

Armenia relies heavily on its southern neighbor for transit, energy and trade, with bilateral trade reaching around 770M USD in 2025. Iran has long been an economic and strategic lifeline for Yerevan, particularly when Armenia was cut off from Azerbaijan and Turkiye during the Nagorno-Karabakh conflict.

Tehran’s importance grew after the 2020 war, as relations between Baku and Yerevan deteriorated and Iran positioned itself as a counterweight to what it saw as threats to the regional balance of power in the South Caucasus. Suspending Iranian flights would therefore mean more than a change in athe civil viation sector. It could signal that Yerevan is willing to accommodate US pressure at the expense of one of its most important regional partnerships.

A new gateway for Iran?

The new US restrictions could reshape Iran’s regional connectivity. If direct flights to neighboring countries keep shrinking, Armenia may become more important as an alternative gateway into the South Caucasus.

That matters most for Iranian travelers. The number of Iranian tourists visiting Armenia increased from 176,453 in 2024 to 182,364 in 2025, a rise of about 3.3%. Iranians made up around 8.1% of all foreign tourists in Armenia last year, the third-largest group after Russians and Georgians.

Yerevan could also become a transit point for passengers heading on to Georgia and beyond, now that Tbilisi has stopped direct Iranian flights. If air links from Iran shrink further, some travelers may fly to Armenia and continue overland, while others cross the Iran-Armenia border by road. That could lift demand for Armenia’s passenger transport, border infrastructure and logistics services.

The same could apply to trade. Restrictions on Iranian aviation do not remove demand for regional movement. Indeed, if anything, they could shift some traffic to land corridors. In that vein, Armenia could become a more important route for Iranian goods and passengers seeking access to the South Caucasus and the Black Sea, even though Turkiye remains Iran’s more established overland link to Europe.

Building the land route

The groundwork for expanded land connections is already being laid. Iranian firms are working on the Kajaran tunnel, a key section of the North-South highway in Armenia’s southern Syunik Province.

On Sept. 14, Eduard Hakobyan, chairman of Armenia’s State Revenue Committee, met Foroud Asgari, Iran’s deputy minister of economic affairs and finance and head of its customs administration. The two signed a protocol on exchanging advance information about goods and vehicles moving through both countries under the “Simplified Customs Corridor.” Under the agreement, cargo inspected on one side of the border will reportedly not undergo another thorough inspection on the other side, which may greatly facilitate trade.

At a visit to Tehran on Oct. 5, Armenian Foreign Minister Ararat Mirzoyan also discussed plans for a second bridge on the Armenia-Iran border and measures to ease freight transport with his Iranian counterpart, Abbas Araghchi.

The TRIPP factor

The picture is further complicated by a new corridor brokered by US President Donald Trump—the Trump Route for International Peace and Prosperity (TRIPP). The initiative seeks to link mainland Azerbaijan with its Nakhchivan exclave through Armenian territory along the Iranian border. Armenian officials have presented the route as a chance for Iran to join an emerging regional network, rather than as a project aimed against Tehran.

On Oct. 28, Armenia’s parliament ratified the framework agreement with the US on TRIPP by 63 votes to 32, with only the ruling Civil Contract faction voting in favor. A joint development company will run the route, with the US holding a 74% stake and Armenia 26% for an initial 49 years. If the deal is extended by another 50 years, Armenia’s stake would rise to 49%. The company’s charter and shareholders’ agreement have yet to be agreed.

Foreign Minister Mirzoyan insisted that all infrastructure on Armenian territory would remain under Armenia’s sovereignty and jurisdiction. The opposition was not convinced. “The US gains a direct presence in the region, particularly along the border with Iran, in a strategically crucial area,” said Anna Grigoryan, head of the opposition Armenia faction.

The Islamic Republic opposes TRIPP, particularly over the presence of US personnel and the potential erosion of its strategic position along the border. In September, Iran reportedly warned Pashinyan that American personnel deployed along the route would be considered “legitimate targets” in the event of a conflict.

Armenian compliance with US sanctions could harden Iran’s position on TRIPP further. As such, for Yerevan, the question of whether to sidestep Washington’s aviation restrictions is not simply about whether to let Iranian airlines keep flying in. It is about managing ties with Tehran while seeking closer integration with the US and greater western involvement in its regional infrastructure.

Other countries trying not to antagonize the Trump administration while keeping some air links with Iran have opted for targeted arrangements rather than blanket bans. Turkiye has suspended Mahan Air flights but refrained from banning all Iranian commercial carriers. Iraq initially halted Iranian flights but later secured a US exemption allowing Iranian airlines, except Mahan Air, to fly to the holy city of Najaf.

Armenia could seek a similar middle ground if US pressure grows—for example, by restricting flights by specific carriers while letting other Iranian airlines keep serving Yerevan, or by seeking a US waiver for selected routes or services. That would reduce exposure to US secondary sanctions without severing an important channel to Tehran. But the broader dilemma would remain. The more Iran’s regional air links are disrupted, the more valuable Armenia becomes as an alternative gateway—and the greater the pressure on Yerevan to choose between keeping that role and avoiding a confrontation with Washington. The more Iran’s regional air links are disrupted, the more valuable Armenia becomes as an alternative gateway. Yet this puts greater pressure on Yerevan to choose between keeping that role and avoiding a confrontation with Washington