US President Donald Trump boards Air Force One at Palm Beach International Airport on February 16, 2025. - Roberto Schmidt/AFP/Getty Images
Boeing has had six years of production problems, safety issues, delivery delays and unhappy buyers of its aircraft. But President Donald Trump’s anger at the delays for the next generation of Air Force One jets could result in a huge blow to what remains of the company’s prestige and finances going forward.
The rift between Trump and Boeing could a be a serious problem for Boeing under a presidential administration that is looking to make massive government spending cuts, lawsuits and Congress notwithstanding.
The company gets 42% of its revenue from US government contracts, according to its most recent filing. In 2022 Boeing moved its corporate headquarters from Chicago to the Washington, DC, suburb of Arlington, Virginia, close to the Pentagon, an indication of how it views the importance of its defense business. But that business is far more at risk than even its troubled commercial plane business.
Trump has groused for days about the wait for the next generation of Boeing 747 jets that are supposed to serve as the primary presidential air transport, officially known as the VC-25B but flying under the name Air Force One when the president is onboard. The jets currently flying under the Air Force One moniker have been in service since the George H.W. Bush administration. The new planes were supposed to be delivered in 2024 when the contracts were originally awarded in 2018, but are still years away from completion according to the latest estimates.
The president said earlier this week he’s interested in possibly looking to buy used jets elsewhere and refurbishing them. It would be a similar move to one he made early in his first term, after he ordered the US Air Force to re-negotiate the Air Force One contract with Boeing. Boeing has been working on refurbishing two 747 jets that had been originally built for commercial use ever since.
“I’m not happy with the fact that it’s taken so long,” Trump told reporters aboard Air Force One Wednesday evening. “There’s no excuse for it.”
He said Wednesday on Air Force One that he wouldn’t consider using a jet made by Boeing’s European competitor Airbus but that, “I could buy one that was used and convert it…. So we’re looking at other alternatives.”
Defense, space business at risk
Trump’s anger at Boeing over the Air Force One delays might be translating into further worries for the company’s larger defense business, according to Richard Aboulafia, a managing director at AeroDynamic Advisory, an aerospace consulting firm.
While Boeing has been a major supplier of military drones in the past, the Pentagon’s most recent drone contracts went to competitors. “Boeing was conspicuously absent,” Aboulafia said.
And Boeing, with its reliance on military procurement for its balance sheet, is vulnerable to spending cuts. Despite Defense Secretary Pete Hegseth calling for increased defense spending just a week ago, the Trump administration issued a memo Wednesday ordering the military to cut 8% from its budget each year for the next five years.
Boeing could thus be an easy target for an administration that is already upset over a major project of great personal interest to Trump, as well as one that has put Elon Musk – no fan of crewed jets like the F-15 built by Boeing for the US Air Force – in charge of those spending cuts.
“It would be extremely easy to cancel the F-15 program and buy more of something else or divert the cash to other needs,” said Richard Aboulafia, managing director of AeroDynamic Advisory, an aerospace consulting firm. He said the military has already indicated a desire to use more drones and fewer piloted aircraft.
Boeing’s space business has been a huge disappointment as well, where it is a major competitor to SpaceX, owned and run by Musk.
SpaceX has been delivering astronauts and supplies to space for NASA for years. By comparison Boeing’s Starliner rocket was years behind plans for its first crewed mission to take astronauts to the International Space Station. When that flight took place last year, problems with the spacecraft forced NASA to have it return to earth without anyone on board, leaving the two astronauts stranded at the ISS. They will soon return home on in a SpaceX Dragon capsule.
Why Air Force One jets cost Boeing so much
Despite Trump’s talk about finding an alternative to provide the next Air Force One jets, the problem is not the basic jet, but what it takes to turn a run-of-the-mill Boeing 747 into the flying communications and command post fit for the President of the United States known as Air Force One, Aboulafia said.
“You can have a jet anytime,” he said. “But it takes a great deal of work to have encrypted communications and managed the military and federal government from anywhere around the world in any circumstance.”
And the jet has been further delayed by a pandemic that came after Boeing agreed to the original contract.
Trump negotiated a $4 billion deal for two new jets with Boeing in 2018. But it has been a disaster for Boeing.
A cake representation of the new Air Force One design is displayed on stage during the Commander-In-Chief inaugural ball. President Trump has selected a new color scheme for the plane than what is used on the current presidential jet. - Patrick T. Fallon/AFP/Getty Images
It was a fixed-priced contract, meaning that Boeing had to absorb any costs that went over what the government was initially willing to pay. Through the end of last year Boeing has reported $2.5 billion in losses on the contract with no end or firm delivery date in sight.
In comments Thursday, Boeing CEO Kelly Ortberg said he is “all in” on trying to speed up the delivery and praised suggestions made by Musk, who visited the Texas facility where the work is being done in December on Trump’s behalf, before he formally started in his role as head of the Department of Government Efficiency.
“The president is clearly not happy with the delivery timing,” Ortberg said at an investors conference. “He’s made that well known. Elon Musk is actually helping us a lot in working through the requirements… to try to help us get the things that are non value-added constraints out of the way, so we can move faster and the president those airplanes.”
Mounting losses
Part of the losses can probably be attributed to Boeing agreeing to take far less money than it originally negotiated on the contract during the Obama administration before Trump took office, which was about $5.3 billion. But Trump had started questioning the cost of the contract in December 2016, after his election but before his inauguration.
“Boeing is building a brand new 747 Air Force One for future presidents, but costs are out of control, more than $4 billion. Cancel order!” he tweeted at the time.
Agreeing to a steep discount to that original price was likely an easy decision for Boeing to make in 2018, when money was flowing into the company at record levels. The company reported $100 billion in revenue for the first time in 2018, and $10.7 billion in operating profit. And it was projecting both revenue and profits would increase further in 2019.
But the financial situation turned bad for the company very quickly after it agreed to the Air Force One deal. Supply chain problems slowed the renovation process, and during the pandemic Boeing had a shortage of the workers with the needed security clearance to work on the plane. Workers need security clearance equivalent to that of people who work at the White House.
Former CEO Dave Calhoun admitted in 2022 comments to investors that “Boeing probably shouldn’t have taken” the risks of the contract during what he called “a very unique negotiation.”
But with Trump threatening to cancel the contract, and with nearly a third of the company’s revenue at the time coming from federal government contracts, Boeing felt it had to agree to the contract for the high profile, high prestige planes.
The original cost and time estimates to produce the two planes were due to the complexity and safety features. They are supposed to be able to fly and protect its occupants from missile attack or even the shock waves of nuclear blast, while still giving the president a flying command post in the case of such an emergency.
Boeing took two of the largest version of its 747 jets that it had already built and started a massive renovation to provide it with the protections needed, but the requirements of Air Force One necessitated what essentially was a complete rebuild anyway.
As bad as the losses on the planes have been, they are only a sliver of the $51.1 billion in core operating losses it has rung up since two fatal crashes of its 737 jets led to a 20-month grounding of its best-selling plane starting in 2019. But it’s not only the commercial plane unit that is losing money. Operating losses from its defense, space and security business soared to $5.4 billion last year and have not posted a profit since 2021.
Boeing’s current rocky relations with the Trump administration don’t suggest that will improve anytime soon.
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