A Boeing jet gifted to US President Donald Trump by Qatar, converted into a temporary Air Force One, makes its media debut at Joint Base Andrews in Maryland on June 19 after completing modification work. [EPA]
A Boeing jet gifted to US President Donald Trump by Qatar, converted into a temporary Air Force One, makes its media debut at Joint Base Andrews in Maryland on June 19 after completing modification work. [EPA]

Boeing is absorbing $2.93 billion (4.3 trillion won) in cost overruns on its contract to supply a new presidential aircraft — a burden so severe that company executives have publicly acknowledged the deal should never have been signed.

The company's latest earnings disclosure shows the new Air Force One program generated $280 million in additional costs in the second quarter of this year alone. Cumulative overruns through the second quarter have now surpassed $3.1 billion. Under the contract, Boeing agreed to absorb all cost overruns on the program.

The roots of the problem trace back to 2018, when Donald Trump, in his first term, persuaded then-Boeing CEO Dave Calhoun to sign a fixed-price contract capping the new Air Force One program at $3.9 billion. The contract was later revised upward to $4.5 billion as items such as spare parts were added.

The provision requiring Boeing to cover all additional costs has weighed heavily on the company, with overruns snowballing every year for the past six years. Boeing has cited engineering design changes related to wiring and other structural requirements, schedule delays, poor performance by key suppliers, and the disruption caused by the pandemic as factors driving costs ever higher.

Boeing CEO Kelly Ortberg said in an internal company email that the company was committing significant support to deliver the heavily modified 747-8 aircraft by 2028. He acknowledged that the Air Force One contract with Trump had been a "unique case" — a deal so risky, he said, that it should never have been signed.

Delivery of the presidential aircraft has also slipped well behind schedule. The first of the two planes was originally due to be handed over in 2024.

With Boeing's delivery of the new Air Force One running late, Trump has been using a Boeing 747 passenger jet donated by Qatar, converted into a temporary Air Force One. The aircraft has drawn criticism for lacking the advanced security features of both the existing presidential plane and the new one under construction. Trump used the temporary jet to travel to Turkey for the NATO summit on June 19 but flew back on the original Air Force One. The Secret Service was reported to have advised use of the original aircraft on the return leg due to security concerns about the temporary plane.


kate01@heraldcorp.com