Air Force One - B747-8 to be renegotiated by The Donald - FlightGlobal

Trump plans to renegotiate new Air Force One pricing

07 DECEMBER, 2016 - BY: STEPHEN TRIMBLE - WASHINGTON DC

US President-elect Donald Trump says he will lead pricing negotiations with Boeing on a programme to replace two 747-200-derived VC-25As serving as executive transports also known as Air Force One.

“That’s what I’m here for,” Trump said during an interview with NBC on 7 December. “I’m going to negotiate prices. Planes are too expensive and we’re going to get the prices down. And if we don’t get the rpices down we’re not going to order them. We’re going to stay with what we have.”

Trump’s comments come a day after he attacked the “out of control” costs with the Air Force One acquisition programme, which he claimed has climbed to $4 billion in a tweet without citing his source.

Boeing chief executive Dennis Muilenburg contacted Trump later on 6 December to discuss the programme’s costs, Trump says.

“I spoke to a very good man yesterday — the head of Boeing. Terrific guy. We’re going to work out,” Trump said in the morning television interview.

Asked if Boeing’s stated objections to Trump’s protectionist trade policy influenced the verbal assault on the Air Force One acquisition programme, Trump said he was unaware of Boeing’s criticisms. He added that his plan to roll back “maybe 85%” of industrial regulations will benefit all companies, including Boeing.

But Trump’s plan to directly intervene in pricing negotiations over a defence contract is highly unusual. The Pentagon’s acquisition process follows an elaborate set of legal procedures, including many developed to guard against personal meddling by individual government officials.

It’s also unclear what prompted Trump to single-out the Air Force One programme suddenly on 6 December. The programme has not been subject to any delays or cost overruns so far. The USAF has only awarded $170 million in contracts to Boeing to conduct early risk reduction work. The service has budgeted a total of $2.7 billion through Fiscal 2021 to develop the Air Force One version of the 747-8, which includes the acquisition of two aircraft. The first aircraft is not due to enter service until three years later, so costs could still rise well beyond the disclosed USAF budget.

If Trump has received more complete or updated cost estimates from his Pentagon transition team, he has not cited the source. If the $4 billion cost figure is accurate, it represents an order of magnitude increase from the $266 million deal Boeing received in 1986 to supply the original 747-200s now serving today as Air Force One. That contract was awarded after a competition between the 747-200 and the McDonnell Douglas DC-10. By contrast, the USAF nearly two years ago selected Boeing without a competition to supply at least two 747-8s to replace the aging VC-25As.