Boeing surpasses $3 billion in losses on Air Force One contract after latest quarterly charge

Boeing has now burned through more than $3 billion on the new Air Force One project, nearly matching the entire contract price, after filing another $280 million charge this quarter.

The aerospace giant disclosed the loss in its second-quarter earnings report, adding to a years-long streak of cost overruns on a fixed-price deal that was supposed to deliver two new presidential jets by 2024. That deadline is long gone. Boeing now says the planes won't arrive until 2028, four years late and counting, with no guarantee the bleeding stops here.

The original contract, signed in 2018, was worth $3.9 billion. Boeing agreed to absorb any costs above that figure. The company has now eaten more than $3 billion in losses on the project alone, meaning Boeing has spent close to $7 billion to build two airplanes it will be paid less than $4 billion to deliver.

Ortberg calls the charge 'disappointing', then pivots to progress

Boeing CEO Kelly Ortberg addressed the latest hit in comments to Breaking Defense, acknowledging the charge while trying to steer attention toward the company's broader defense portfolio.

"While the charge is disappointing, we recognize how critical schedule performance is to our customer and we are investing accordingly to maintain our commitment to deliver the airplane in 2028. This shouldn't overshadow all the meaningful progress we're making to reduce the risk across our defense portfolio, and we are in much better shape than we were two years ago."

Boeing attributed the losses to "an investment in additional production and certification resources," the Washington Examiner reported. The company offered no detailed breakdown of what went wrong or how much more the project might ultimately cost.

That vague explanation has become a pattern. In a previous quarter, Boeing recorded a $482 million loss on the same Air Force One contract due to higher-than-estimated manufacturing costs, as AP News reported. Then-CEO David Calhoun conceded at the time that "any unplanned hurdles can introduce unrecoverable cost" in fixed-price contracts, a frank admission that the deal's structure left Boeing exposed from the start.

The Air Force One losses contributed to a broader $1.64 billion quarterly loss for Boeing in that earlier period, Newsmax noted, with the presidential jet program standing out as one of the company's most painful line items.

A $400 million Qatari jet fills the gap Boeing left

With Boeing's timeline slipping year after year, the Trump administration found a workaround. Qatar gifted a $400 million Boeing 747-8 luxury jet to the United States, and the Department of Defense formally accepted it on May 21, Breitbart reported. The aircraft is serving as an interim replacement for one of the two aging presidential planes that have been in service since George H.W. Bush occupied the Oval Office.

President Trump debuted the Qatari-gifted jet on July 1, flying it to North Dakota for a speech at the opening of the Theodore Roosevelt Presidential Library. The current Air Force One fleet is nearly 40 years old, and the delays in Boeing's replacement program left the administration with few options.

Trump defended the decision during an interview with Sean Hannity aboard the existing Air Force One. National Review reported his response:

"Now, some people say, oh, you shouldn't accept gifts for the country. My attitude is, why wouldn't I accept the gift?"

The gift drew bipartisan criticism. Senate Minority Leader Chuck Schumer called it "the largest bribe from a foreign government in American history." Sen. Rand Paul, a Kentucky Republican, said the Constitution "specifically says you can't take gifts from foreign leaders" and added that "the jet probably sends the wrong signal to people."

Aerospace experts estimate the retrofit needed to bring the Qatari jet up to presidential security and communications standards could cost more than $1 billion, with the work, to be done by Boeing, stretching over several years. That means Boeing stands to collect additional revenue from modifying a plane that only became necessary because Boeing couldn't deliver the ones it was already paid to build.

The broader context of Boeing's relationship with the federal government extends well beyond Air Force One. The company has remained central to major diplomatic and trade discussions, including a recently announced China-Boeing deal that could involve hundreds of aircraft.

Fixed-price contract locked Boeing into a losing bet

The structure of the 2018 deal is central to understanding how the losses mounted. Under a fixed-price contract, the government pays a set amount, in this case $3.9 billion, and the contractor bears responsibility for any cost overruns. Boeing agreed to those terms, and the terms have proved devastating.

Calhoun, Ortberg's predecessor, acknowledged the inherent risk plainly enough. Fixed-price defense contracts leave no room for error, and Boeing encountered errors at every stage, production setbacks, certification delays, and manufacturing costs that far exceeded projections.

Yet Boeing kept bidding on and accepting these contracts. The Air Force One deal was supposed to showcase the company's ability to handle high-profile government work. Instead, it became a case study in how a defense contractor can lose billions on a single project while the taxpayer-funded customer waits years past the promised delivery date.

Security concerns around presidential aircraft have also drawn attention in recent months, with an alleged plot targeting a White House event underscoring the stakes involved in protecting the president and the assets surrounding the office.

Meanwhile, the government's handling of sensitive information related to Air Force One has itself become a legal issue. The Justice Department faced judicial pushback over its leak investigation tactics in a case connected to reporting on the presidential aircraft program.

Four years late, $3 billion over, and still no delivery date anyone trusts

Boeing says 2028. The company said 2024 once, too. Before that, Calhoun told investors the company was "getting past these hurdles" and remained "committed to delivering two exceptional airplanes." Those airplanes still don't exist.

Ortberg's assurance that Boeing is "in much better shape than we were two years ago" invites an obvious question: better shape relative to what? Two years ago, the project was already billions over budget and years behind schedule. Improvement from that baseline is a low bar, and the $280 million charge filed this quarter suggests the improvement hasn't translated into financial stability on the program.

The Air Force, as the customer, has limited leverage. The planes are partially built. Switching contractors at this stage would mean starting over, more delays, more cost, more years without modern presidential aircraft. Boeing knows this, which is why the company can file quarter after quarter of losses and still frame the situation as progress.

For taxpayers, the math is straightforward. They are paying $3.9 billion for two airplanes that were due two years ago. Boeing is losing an additional $3 billion of its own money trying to finish the job. And a foreign government stepped in with a $400 million jet because the contractor couldn't meet its deadline, a jet that will cost another billion or more to retrofit, with the same contractor doing the work.

When a company loses more money building something than the customer agreed to pay for it, that is not a business setback. It is a structural failure of planning, execution, and accountability, the kind that used to end careers and contracts, not earn new ones.