US President Donald Trump should not boast about the US$10 billion (RM42 billion) deal between Boeing and Malaysia Airlines Bhd (MAB), The Wall Street Journal reports today.

This is because the figure released by the American aircraft manufacturer came to around US$3 billion – before discounts and unspecified amount of maintenance work – which will lower further the final figure, the business daily said, highlighting the opaque nature of the aircraft industry.

Prime Minister Najib Razak put a US$10 billion price tag to the Boeing deal after meeting Trump at the White House.

MAB signed a memorandum with the US aircraft maker yesterday to purchase of 16 aircraft – eight wide-body 787 Dreamliners and eight narrow-body 737 MAXs.

According to WSJ, the disparity between the sale value described by the political leaders and the actual deal being worked out between Boeing and MAB reflects a number of complicated factors in the aircraft industry, including existing sales agreements, potential future agreements, the options covered under each and the schedule of aircraft deliveries.

The White House later clarified that the deal was worth a potential US$4 billion but did not explain the discrepancy with Trump’s earlier comments.

Najib announced the plan to buy additional planes for the country’s flag carrier during a visit to the White House, telling Trump that Malaysia Airlines would buy 25 Boeing 737 jets and eight 787 Dreamliners.

He said the airline would probably add another 25 737s in the near future, a deal worth more than US$10 billion within five years.

Boeing did not comment on Najib’s number.

Questions, however, were also raised over other deals announced by the Trump administration.

The White House said it brokered US$110 billion in military sales to Saudi Arabia during a state visit last May.

Many of the deals were already in the works, or remain unaccounted for by defence companies or the Trump administration, said WSJ.

Trump also claimed credit for helping lower the cost of the Lockheed Martin Corp F-35 combat jet, even though the latest batch of planes matched pricing largely agreed upon before he took office.

WSJ said commercial aircraft sales, subject to frequent price fluctuations, are often announced at meetings of government leaders following months or years of talks between plane makers and customers, reflecting their large dollar value and the broader importance of the aerospace and airline industries to national economies.

The sale of planes to MAB, some 2½ years after it lost two aircraft in two disasters involving the death of more than 500 passengers, has some unusual features.

Boeing said on Tuesday it had reached a memorandum of understanding to sell Malaysia Airlines eight of its 787-9 Dreamliner long-range jets with a total list price of US$2.2 billion, as well as eight 737 MAX single-aisle planes.

However, the potential order involved converting eight of a previous order of 25 Boeing 737 jets reached last year into orders for the Dreamliner, plus the right to buy eight more of the smaller planes.

Malaysia Airlines has been looking to order around 30 wide-body jets and has been negotiating with Boeing for the 787 and Airbus for its A330neo jet.

The conversion of orders for the smaller 737 jets into those for the larger 787 is unusual, as most airlines have been trimming wide-body purchases for smaller aircraft, for which there is a six-year waiting list, the WSJ said. – September 14, 2017.