Delayed Air Force One programme hits Boeing’s Q2 results

Boeing’s Air Force One replacement programme is now more than US$3.1 billion over budget, with the company taking a further US$280 million charge in Q2 2026 to accelerate production and certification of the delayed VC-25B aircraft. The fixed-price contract, originally valued at US$3.9 billion and later increased to about US$4.5 billion, has slipped from a planned 2024 delivery date to at least 2028. The two VC-25B aircraft are being converted from Boeing 747-8i airframes originally built for Russian airline Transaero, with extensive modifications required for presidential use, including secure communications and defensive systems. Unlike the existing VC-25A fleet, the new aircraft will not have an in-flight refuelling capability. Attempts to bridge the delay have created further costs and complications, with a Qatari-donated Boeing 747-8 requiring major security upgrades reportedly costing hundreds of millions of dollars. Boeing’s Air Force One losses contributed to a US$428 million second-quarter 2026 loss, highlighting the financial pressure from fixed-price defence programmes. Boeing’s programme to replace the US Air Force’s ageing Air Force One aircraft has suffered another major financial setback, with the company absorbing a further US$280 million in costs during the second quarter of 2026 as it pushes to complete the delayed presidential jets by 2028. The additional expense, linked to production and certification work on the two VC-25B aircraft, contributed to Boeing’s latest quarterly loss and brings the total cost overrun on the fixed-price programme to more than US$3.1 billion. In an internal message to employees, Boeing president and chief executive Kelly Ortberg said the company was committing “significant resources” to accelerate work and meet the government’s revised delivery target. The aircraft were originally scheduled to enter service in 2024 under a contract signed during President Donald Trump’s first term. The initial agreement capped the cost to US taxpayers at US$3.9 billion, but the value was later increased to approximately US$4.5 billion to cover additional requirements, including spare parts and other programme needs. Despite the increase, Boeing has continued to absorb hundreds of millions of dollars in additional costs each year because the contract was structured as a fixed-price deal. The VC-25B aircraft are based on Boeing’s 747-8i platform and are being converted from two airframes originally completed for Russian airline Transaero. The aircraft were built with passenger interiors but were never delivered after the airline cancelled the order and they were subsequently placed into storage. The US government acquired the aircraft as a potential cost-saving measure, but the extent of any savings has been questioned given the extensive modifications required to transform commercial aircraft into highly secure presidential transports. The upgraded VC-25Bs will feature advanced communications, defensive systems and specialised presidential mission equipment. However, unlike the current VC-25A Air Force One aircraft, the new jets will not include an in-flight refuelling capability. The programme’s escalating costs have added pressure on Boeing’s defence operations, which have already faced challenges across several fixed-price contracts. The Air Force One losses contributed to Boeing reporting a US$428 million net loss for the second quarter of 2026, following a US$7 million loss in the first quarter. The delays have also prompted discussion of temporary alternatives. Trump previously supported using a Boeing 747-8 aircraft donated by the Qatari royal family as an interim presidential aircraft while Boeing completed the VC-25B programme. That aircraft has required its own expensive modification effort, including upgrades to electrical systems, power infrastructure, secure communications and self-defence capabilities. The retrofit is estimated to have cost hundreds of millions of dollars, with some reports placing the broader security upgrade effort at around US$1 billion. The Qatari aircraft briefly operated as Air Force One in early July before returning for further work. Reports indicated that security concerns led the Secret Service to recommend that Trump use the existing VC-25A aircraft for a higher-risk departure from the NATO summit, amid questions over whether the temporary aircraft had all required protective capabilities.