American CEO Doug Parker Agrees With Donald Trump: Boeing’s Prices Are Too High

Doug Parker, CEO of American Airlines, appeared on CNBC’s Squawk Box and says that Donald Trump isn’t the only one that has a problem with Boeing’s prices.

We have a great relationship with Boeing. Donald Trump’s not the first person that’s complained about their prices, I can assure you that.

Parker is no stranger to pushing back aircraft orders, American has delayed delivery of Airbus A350s.

However Boeing’s commercial aircraft prices are a whole different universe from Air Force One.

  • Commercial aircraft manufacturing is a highly competitive business, and in many ways becoming increasingly so (although demand for large narrowbodies may exceed supply in the short term) as Bombardier becomes a more significant player now that Delta has placed a large order for their CSeries.

  • Air Force One is a bespoke product ordered by a single customer. There are high end VIP jet models, but something that not only offers secure communications but can sustain a nuclear blast and repel missile attacks simply doesn’t have a well developed competitive market.

  • Large airline aircraft orders and government aircraft orders follow distinctly different processes.


American Airlines Boeing 787-9

So while Parker was trying to be funny, and deflect questions like what the appropriate cost of Air Force One ought to be (it’s really hard for anyone to offer a right answer to that question) but more importantly whether a company ought to be concerned by a political environment where the President lashes out at individual companies and potentially punishes them in business dealings after they criticize him in the media, there’s really not a whole lot of similarity to the negotiating tactics of American Airlines and Donald Trump over Twitter.

About Gary Leff

Gary Leff is one of the foremost experts in the field of miles, points, and frequent business travel - a topic he has covered since 2002. Co-founder of frequent flyer community InsideFlyer.com, emcee of the Freddie Awards, and named one of the "World's Top Travel Experts" by Conde' Nast Traveler (2010-Present) Gary has been a guest on most major news media, profiled in several top print publications, and published broadly on the topic of consumer loyalty. More About Gary »

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Comments

  1. Gary Trump and Parker should go after you for purposely misstating where the company headquarters is located and the location of our largest hub.

    Southwest is a Dallas airline, AA is Ft. Worth. For decades AA has messaged this to employees and the media yet you can’t seem to get it right.

  2. Yes @Jeff, why not go after a blogger, who may or may not have mistaken called one airport a hub or another. That is exactly the kind of level-headed thinking that this country needs. Kill free speech, while they are at it too. Bravo.

  3. Who cares ? and who cares what Doug has to say he is simply “Trickie Dick” Anderson’s replacement for US airlines. Besides Doug buys AB because he gets them cheaper. When there was AmericaWest with no real credit that was the only place he could get planes

  4. Do you ever shut up about Donald? we know your live in the blueberry in a cherry pie but my Christ Gary.

  5. Boeing prices are not too high. As a stockholder, let those that complain buy something. There is really only one other choice. As far as Air Force One, if ferrethead wants to buy the new ones from Airbus, let him try. Ferrethead will never live that one down!

  6. Boeing is the largest corporate welfare receipient in the US. We (the taxpayers) pay for their factories – even the tools. They have received billions in corporate welfare from local, states, and federal governments. The least they could do is give a discount on Airforce One. I bet Airbus would have Alfred a good deal on a couple of A380 for air force one.

  7. Hey you Trump douches… Gary makes an extremely valid point about a President lashing out at iconic American companies and individuals. What f’in universe do you live in where that is acceptable. You idiots sicken me to my core, you really do. The one truth he told was the 5th ave shooting claim he made, you blind fools would defend him whatever he does or says. Trust me he will ruin America and most likely write many young American’s death sentence as he seems to be war hungry too. A horrible time.

  8. Who cares what Trump or Doug Barker think! I wouldn’t want to invest in the airline biz after Trump become president. Belittling and insulting our CIA officers isn’t really a good idea if you want to combat global terrorism. Use the miles quickly!

  9. @bill Let me get this straight, you approve of Donald trump shaving $100MM of of a $4B order from a $18T economy? That’s 0.00005% of our economy. I respectfully disagree. Rather, Mr. Trump should focus on the other 99.999995% of the economy than picking fights over pennies. Especially because Airline manufacture is NOT an ailing portion of our economy- which is the platform he ran on- to help disaffected industries.

  10. Andrew, I hope you are successful in getting your emotional support pony onboardl with you as it sure sounds like you need it.

  11. Of course he’ll get the price lowered so he can claim he did it but what he’s going to do is tell them to raise the price of something else to compensate. He’s only looking to score cheap political points just like his lies about saving 1100 jobs when in fact he saved around 800 but had to give away $7 MILLION in tax payer money to do it. I’ll bring all of our jobs back from China if he pays us the same amount. Are we going to pay every company to do this?

  12. I don’t understand the three
    Big one with more charing and worth services got problem buying new planes
    But the gulf airlines which give better of everything could buy planes with not problem one greed.

  13. Maybe Doug should focus on upgrading the deplorable Old USAir airbus fleet, Not to mention his brilliant move of two rows on upgraded A319, way to go just keep alienating your best revenue customers

  14. Boeing is trying to recover the $20+ Billion cost overruns on the 787. The worst thing that happened to Boeing was the merger with Douglas. Douglas being a primarily government contractor never saw a cost overrun they didn’t like. However, that doesn’t work well in the competitive private sector. The best thing that could happen to Boeing is to purge the Douglas management guys. For those commenting above who are stock holders, have at it. Additionally, Boeing’s “fuzzy math” accounting practices are raising some eyebrows as well. The 737 Max that is supposed to be the cat’s meow is disappointing at best. Someday Boeing will stop catering to Southwest Airlines and “clean up” the 737 cockpit.

  15. Trump should not be putting pressure on Boeing or any company by tweeting. It’s completely irresponsible for a president or president elect to be manipulating the stock market based on his tweets. It would not surprise me if people like Icahn were profiting from this by buying and selling Boeing stock. People go to jail for stock manipulation. I’m all for getting the best deals on planes but this is just beyond irresponsible. All of a sudden anything and everything has become acceptable behavior.

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