Boeing loses $1 billion over Trump’s Air Force One deal

Boeing said Wednesday it lost a whopping $1.1 billion in costs related to its deal with the Trump administration to modify two large 747s to serve as Air Force One, and CEO Dave Calhoun acknowledged that the aviation giant ” probably shouldn’t have cut the deal in the first place.

Boeing warned that there could be even bigger losses on the Air Force One contract in future quarters.

Air Force One is the official designation for any aircraft carrying the President of the United States.

“Air Force One, I’ll just call it a very unique moment, a very unique negotiation, a very unique set of risks that Boeing probably shouldn’t have taken,” Calhoun said by phone with analysts.

“But we are where we are and we are going to deliver great aircraft,” Calhoun said shortly after Boeing reported a loss for the first quarter of 2022.

“And we’re going to recognize the costs associated with that.”

On Wednesday, Boeing posted a net loss of $1.2 billion in the first quarter, with $660 million in costs related to delays and higher costs for the Air Force One program.

US President Donald Trump arrives from a day trip to Georgia aboard Air Force One at Joint Base Andrews, Maryland, USA on July 15, 2020.

Jonathan Ernst | Reuters

The company said the Air Force One program’s first-quarter fees are pushing total program-related losses in excess of $1.1 billion.

“The risk remains that we may need to record additional losses in future periods,” Boeing said in a securities statement.

The deal with Boeing to buy Air Force One aircraft was brokered by then-CEO Dennis Muilenburg and then-President Donald Trump in February 2018.

This requires Boeing, not the federal government, to bear the costs of cost overruns for the two engine modifications. Boeing 747 aircraft.

Under this fixed-price contract, Boeing receives about $4 billion for its work.

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Trump boasted in 2018 that “Boeing gave us a good deal. And we were able to accept it.”

Boeing was positive about the deal four years ago.

“Boeing is proud to have created the next generation of Air Force One, providing US presidents with a flying White House at an outstanding taxpayer price,” he tweeted in February 2018. “President Trump made a great deal on behalf of the American people.”

Trump also told CBS News that the planes would get rid of Air Force One’s traditional blue color scheme in favor of “red, white and blue, as I see fit.”

“Air Force One is going to be incredible,” Trump said at the time. “This will be the top of the line, the top of the world.”

A month after being elected president in November 2016, Trump complained on Twitter about the “out of control” costs of Boeing’s then deal to build a new Air Force One.

“Cancel the order!” Trump tweeted at the time.

He later boasted that his negotiations with Muilenburg had saved taxpayers $1.5 billion.

Boeing fired Muilenburg as CEO in December 2019 for his handling of two 737 Max crashes that killed 346 people.

He was denied severance pay but received $60 million in pension benefits and company stock, Boeing said a month after he was fired.

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