Boeing To Lose $1.2B On New Air Force One Jets

 - May 6, 2022, 11:59 AM
Production of the two repurposed Boeing 747-8is slated to replace the current Air Force Ones has been delayed by two years and will result in a $1.2 billion loss for Boeing, according to the CEO. (Photo: Boeing)

Boeing CEO Dave Calhoun said the two repurposed 747-8is slated to replace the current Air Force One airplanes now won’t be ready until 2026 at the earliest—a two-year delay. He told financial analysts that Boeing expects to post a $1.2 billion loss on the $3.9 billion deal, which was announced in 2018, and that it was “a very unique set of risks that Boeing probably shouldn’t have taken.”

The aircraft, N894BA (S/N 42416) and N895BA (S/N 42417), which will be designated as VC-25Bs by the U.S. Air Force, were originally slated for delivery to defunct Russian airline Transaero, which defaulted on these airplanes. The aircraft were then placed into storage in 2016. In 2015, Boeing had proposed building two new Air Force One aircraft for just over $5 billion—a figure later rejected in 2017 by former President Donald Trump, who personally negotiated the repurposed aircraft deal with former Boeing CEO Dennis Muilenburg. 

However, the program soon ran into delays, triggered by the complexities of retrofitting a civil airliner to a military aircraft equipped with defensive and reinforcement systems, sophisticated communications, and the ability to resist electromagnetic pulse interference from a nuclear blast, as well as labor and supply disruptions from the Covid pandemic.

Boeing and interior subcontractor GDC Technics publicly locked horns in messy litigation related to the delays. Boeing ultimately fired GDC from the project, which spawned GDC’s Chapter 11 bankruptcy filing last year. Boeing then assumed the leases on GDC’s hangars at Port San Antonio, where that work was being done. 

The current pair of Boeing B747-200, VC-25A aircraft that serve as Air Force One were placed into service in 1990 at a cost of $325 million each.