- Boeing’s defense unit reported a $924 million loss in Q3, with $482 million lost on the two 747 jets for the next Air Force One fleet.
- The total loss on the presidential planes in the last five years is estimated to be $2.4 billion.
- Boeing blamed higher manufacturing expenses due to engineering changes, labor shortages, and supplier negotiations.
- The company signed a $3.9 billion fixed contract with the US government in 2018 to appease President Trump and prevent the cancellation of the order.
- CEO David Calhoun admitted that agreeing to produce the new Air Force One planes was a questionable decision.
- Designing planes for presidential use is complex, requiring missile-defense systems, nuclear-protected communications, and custom features.
- Boeing had to repurpose two planes originally made for a Russian airline to meet cost-cutting demands.
Boeing’s Defense Unit continues to face considerable difficulties, as evidenced by their reported $924 Million Loss in Quarter 3 alone. Of this total loss, $482 Million can be directly attributed to two 747 jets intended to serve as Air Force One fleet – this brings their total loss over five years up to an estimated $2.4 Billion! Various causes were given for the financial setback such as higher manufacturing expenses due to engineering changes, labor shortages and supplier negotiations.
Boeing’s Air Force One project has proven to be an immense financial drain. In 2018, to appease then-President Trump, Boeing entered a $3.9 billion fixed contract with the US government for producing five planes for Air Force One production – something CEO David Calhoun acknowledged was “very unique negotiations,” but may later regret.
Designing planes suited for presidents can be a difficult challenge. Air Force One must meet not only standard commercial aircraft requirements such as advanced avionics and safety features, but also special features like missile defense systems and nuclear-protected communications – along with any custom features like presidential branding or decor including “custom bald eagle wallpaper.” To further complicate matters Boeing had to repurpose two planes originally manufactured for Russian airlines to meet President Trump’s cost-cutting demands.
Conclusion Boeing’s defense unit is facing substantial financial strain due to losses sustained while producing Air Force One fleets for Presidents. While initially undertaken with good intentions of satisfying presidential requests while cutting costs, this project has proven complicated and expensive for Boeing’s defense unit, leading to further losses that need mitigating as soon as possible. Now facing this difficult challenge is finding ways to turn around their fortunes for them while mitigating further losses for them as a whole.