Boeing, the world’s largest aerospace company, is facing a huge financial loss and a public relations nightmare over its contract to build the next generation of Air Force One, the presidential plane.
The company reported another $482 million loss on the contract to retrofit two 747 jets into the most advanced and secure aircraft in the world. Boeing has now lost more than $1 billion on each of the two jets, and the delivery date has been continually pushed back.
The contract, which was signed in 2018 under pressure from then President Donald Trump, was supposed to cost $3.9 billion and be completed by 2024. But since then, Boeing has faced a series of challenges, including rising supplier costs, technical glitches, design changes and quality issues.
“We regret that decision today,” Boeing CEO Dave Calhoun said last year about signing the contract with the Air Force. “It was a bad outcome for us”.
The Air Force One program is one of the most prestigious and sensitive projects in the defense industry, as it involves providing a flying command center for the president in times of crisis. The current fleet of two 747-200s, which have been in service since 1990, are nearing the end of their lifespan and need to be replaced.
The new planes, which are based on the 747-8 model, will have improved features such as advanced communications, missile defense systems, nuclear hardening and refueling capabilities. The planes will also have a distinctive blue and white livery, as requested by Trump.
“We got a good deal on Air Force One,” Trump said in 2018. “I saved the taxpayers $1.5 billion”.
But critics say that Trump’s involvement in the deal was more of a political stunt than a cost-saving measure, and that he interfered with the normal procurement process. They also point out that the original estimate for the program was $3.2 billion, not $5.6 billion as Trump claimed.
“The Air Force One program is a mess,” said Loren Thompson, a defense analyst with the Lexington Institute and a consultant to Boeing. “Boeing underestimated how much it would cost to build these planes, and now it’s paying the price”.
The Air Force One program is expected to cost $5.3 billion, up from the original estimate of $3.2 billion, according to the Government Accountability Office. The delivery date has also been delayed by at least a year, and could be further postponed due to the ongoing pandemic and supply chain disruptions.
“The Air Force continues to partner with Boeing to drive cost out of the program,” said Ann Stefanek, an Air Force spokeswoman. “We look forward to providing this critical capability to our nation’s senior leaders”.
Boeing, which is still recovering from the fallout of its 737 Max crisis, said that it is committed to delivering safe, reliable and effective presidential aircraft. The company’s defense unit recorded a $924 million loss in the third quarter of 2023, mainly due to the Air Force One program.
“Boeing is committed to delivering safe, reliable and effective presidential aircraft,” said Boeing spokesman Peter Pedraza. “We continue to make steady progress toward that goal”.
– Air Force One debacle: Boeing has now lost more than $1 billion on each of the president’s two new jets, CNN, October 25, 2023
– Boeing’s Air Force One charges top $2 billion, drag down profits, Air Force Times, October 25, 2023
– Signal: delays, flaws drive $1.6bn Q3 loss for Boeing, Air Force Technology, October 26, 2023
– Boeing’s Losses on New Air Force One Jets Keep Ticking Up, MSN, October 25, 2023