Boeing Could Increase The New Air Force One’s Price

Boeing has sent a letter of intent to the US Air Force saying that the two new 747-8 Air Force One planes may end up costing more than the agreed-upon $3.9 billion due to an insolvent subcontractor and the pandemic. Furthermore, the planemaker now expects the flying fortress jumbos could be delivered in 2025, one year later than initially agreed.

Boeing has sent a letter of intent to the USAF asking to increase payment for the new Air Force One 747s. Photo: Getty Images

Boeing initially requested $5 billion

A US Air Force official confirmed Tuesday that Boeing has signaled that not only will the new Air Force One 747s most likely be delayed, but they could also turn out to be more expensive. Boeing is citing difficulties arising due to COVID-19 and conflicts with subcontractor GDC Technics as reasons for the increased expenses and altered delivery date.

When the two parties agreed to the contract in 2018, Boeing initially asked for $5 billion. However, then-President Donald Trump took to Twitter and, in his usual direct manner, called the cost ‘ridiculous’ and said the USAF should ‘cancel order’. Thus, Boeing dropped the price to $3.9 billion. The manufacturer then scheduled delivery for 2024.

Meanwhile, during a meeting of the House of Representatives armed services subcommittee on seapower and projection yesterday, the principal deputy assistant secretary for Air Force acquisition, Darlene Costello, said that Boeing had sent a letter of intent asking to increase the payment. Costello did not indicate what kind of sum Boeing might have in mind but said negotiation processes would be underway shortly.

New Air Force One Boeing 747-8 Getty
Boeing lowered the price of the project after then-President Trump called Boeing’s initial ask ‘ridiculous’. Photo: Getty Images

Stay informed: Sign up for our daily and weekly aviation news digests.

Schedule risk assessment in progress

The delay to the project has arisen out of the conflict with Boeing subcontractor GDC Technics. The Texas-based aerospace company was awarded the contract to design and build the interior of the two 747-8s. However, Boeing canceled the contract in April, as the insolvent supplier ‘failed to meet obligations’.

GDC Technics filed for Chapter 11 bankruptcy protection the same month, and the two parties have since engaged in suing and countersuing each other. The subcontractor now seeks $20 million in damages from Boeing. The supplier problems may cause the delivery of the new White House flying fortresses to be pushed back a year to 2025.

During yesterday’s hearing, as reported by the Financial Times, Costello said Congress would receive an update in September on whether or not the schedule would change.

“We have received from Boeing notification of a revised schedule on their part. We are in the midst of doing a schedule risk assessment . . . When they complete [the assessment] later this summer, we will determine if we need to make any adjustments to the schedule.”

Air Force One
The USAF says it will inform Congress about a new delivery schedule in September. Photo: Getty Images

Boeing making ‘steady progress’

Simple Flying was unable to reach Boeing for comment ahead of publication. However, a spokesperson for the manufacturer told Reuters that,

“We continue to make steady progress on these programs and are working closely with the U.S. Air Force.”

What do you make of the potential delays and increased price tag of the Air Force One 747s? Leave a comment below and let us know.