The fixed-price development contract for Air Force One negotiated during the Trump administration created risks that Boeing shouldn’t have taken, President and CEO David Calhoun said today, which have resulted in a $660 million charge.
The COVID-19 pandemic and high inflation rates of the past two years have led Boeing to incur unanticipated losses, Calhoun said during the company’s first-quarter earnings call Wednesday. The VC-25B accounted for some of the biggest financial hits, he said.
“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. “But we are where we are, and we’re going to deliver great airplanes.”
The contract for the two aircraft was signed before Calhoun took the helm of Boeing in January 2020 and was negotiated between former President Trump and former Boeing Chairman Dennis Muilenberg.
VC-25B has been plagued by delays, and the Air Force is now expecting the aircraft won’t be delivered until the end of 2026, two years later than expected, service spokeswoman Ann Stefanek has said.
The delays stem from an array of factors, Stefanek said, including a financially insolvent interiors supplier, GDC Technics, and the transition to a new provider. “Manpower limitations, wiring design timelines and test execution rates” also played a role in the timeline shift, she said.