Cost overruns for the new Air Force One jets continue to pile on massive losses for Boeing. From a report: Boeing on Wednesday reported another $482 million in red ink on the contract to retrofit two 747 jets into the next generation of the presidential plane. Boeing has now lost more than $1 billion on each of the two jets. The company has been reporting losses on the planes for years, as CEO Dave Calhoun admitted last year that the company should never have signed the contract with the Air Force to produce the jets for $3.9 billion. Supplier costs have soared since then, and the delivery date has been continually pushed back. Boeing took $1.45 billion in losses on the planes last year, and $318 million in 2021.
“Air Force One, I’m just going to call a very unique moment, a very unique negotiation. A very unique set of risks that Boeing probably shouldn’t have taken,” Calhoun said in April last year when discussing $660 million of those losses reported at that time. “But we are where we are.” The company said the latest loss on the program is a result of engineering changes, labor instability, as well as the resolution of negotiations with one of its suppliers. Very often higher costs on defense contracts can be passed onto US taxpayers, but under pressure from then-President Donald Trump, who was threatening to cancel the contract for the planes, Boeing agreed to a fixed price contract on the two new jets.