Boeing absorbs another $280 million hit on delayed Air Force One program

Boeing's ambitious project to build two new Air Force One aircraft has become a significant financial and public relations burden, with the company reporting an additional $280 million loss in its second-quarter earnings. This latest hit brings Boeing's total losses on the program to a staggering $3.08 billion.

The aerospace giant accepted a fixed-price contract for the $3.9 billion project to supply two new VC-25A aircraft, based on the 747-8 model, to replace the aging fleet currently used by President Donald Trump. However, the program has been plagued by a series of costly setbacks.

These issues include repeated configuration changes, the discovery of corrosion in aircraft structures, and the need for technological upgrades due to the prolonged timeline and obsolescence of some onboard systems. Boeing has also had to contend with a known issue affecting the 747-8 fleet. To expedite the process, the company purchased two secondhand aircraft for conversion, but this has not prevented substantial overruns.

To address the mounting challenges, Boeing has been rapidly recruiting senior engineers and mechanics, offering exceptionally high salaries for personnel with the required security clearances. The company further increased its investment in the last quarter by adding personnel and resources to meet a revised schedule. The first aircraft is now expected in 2028, with the second following a year later. The total program cost is now projected to reach approximately $6.9 billion, with Boeing absorbing all costs beyond the government's payment due to its failure to secure compensation for future design changes and underestimating the work scope.