Boeing Reaches Deal To Provide New Presidential Aircraft

Boeing Co. (NYSE:BA) has been awarded the Air Force contract to build two 747s that will become future Air Force One aircraft. The aerospace giant will sell the U.S. Air Force two commercial 747-8 jetliners that will be modified into the presidential aircraft. In a statement, Boeing spokeswoman Caroline Hutcheson said that the two aircraft were sold to the Air Force “at a substantial discount from the company’s existing inventory.”

According to reports, the two Boeing jumbo jets were originally set for service with now-defunct Russian airline Transaero. The airline ceased operations in 2015 and never took ownership of the aircraft. Boeing had reportedly paid to store the planes in new condition while looking for a buyer. The jets have already been flight-tested.

The modifications are expected to begin in 2019 and the planes should be ready by 2024. Upgrades to the aircraft will include a mission communications system, a medical facility, a self-defense system, and an “executive interior.” The White House Military Office is working with the Air Force to define the aircraft’s requirements.

The agreement reportedly provides the Air Force with a deep discount on the two surplus planes. “We got a really good deal,” Air Force Secretary Heather Wilson said in an interview. The model carries a list price of $386.8 million.

The Air Force said in a statement that the negotiated price paid for the aircraft would not be released, as Boeing considered it sensitive competitive information. That nondisclosure was part of the condition for the sale.

Wilson said, “The whole program cost will be known, but the actual price of individual airframes” won’t be. The most recent Air Force estimate is that the Air Force One program will cost $3.51 billion from the current fiscal year through fiscal 2022, mostly for research and development.

As president-elect, Donald Trump criticized the cost of the next generation of Air Force One last year, saying that the $4-billion price tag was “out of control.” Trump threatened to cancel the order and later boasted of negotiating with Boeing to reduce the expense. The current Air Force One aircraft were ordered by President Reagan and have been used since President George H.W. Bush’s administration in 1990.

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