Boeing planes have been transporting US presidents since President Roosevelt, and at the moment a 747-200 serves as “Air Force One.” There are two 747-200s in the Air Force fleet that can potentially operate as Air Force One, the first of which was delivered in 1990. Obviously this is an aging plane, so it was announced a while back that the government and Boeing had entered into a deal to acquire new 747-8s to act as Air Force One.
However, President Trump wasn’t happy with this excessive spending, as he called for the government to cancel the order due to the price tag, which he claimed was over $4 billion.
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!
— Donald J. Trump (@realDonaldTrump) December 6, 2016
Last August it looked like the government and Boeing had neared a creative solution, with the possibility of the US government acquiring two 747-8s at a much lower cost. These were planes that were stored by Boeing, as they were supposed to go to a Russian airline that went out of business (Transaero). The planes were flight tested and then put in storage, and haven’t found a buyer since.
They never ended up reaching a deal, though now it looks like the White House and Boeing have come to an agreement for acquiring two new 747-8s.
The White House has confirmed that a deal has been reached with Boeing to acquire two new 747-8s, which will be used as Air Force One. Per CNBC:
“President Trump has reached an informal deal with Boeing on a fixed price contract for the new Air Force One Program,” a White House spokesman said. “Thanks to the President’s negotiations, the contract will save the taxpayers more than $1.4 Billion.”
The deal is expected to be worth $3.9 billion, which is under the magic $4 billion price that Trump was hoping for.
While a 747-8 “only” costs about $350 million at list prices, the reason the US is paying almost two billion USD per plane is because of the R&D required, as well as how many modifications have to be made, which is where a majority of the cost comes from.
A White House spokesperson claims that Trump saved taxpayers about $1.4 billion USD thanks to his negotiations, though Politifact has a different take on this, based on a story they did last December following Trump’s Tweet:
The Air Force has published a budgetary document that says research, development, testing and evaluation of the new Air Force Ones — officially known as the Presidential Aircraft Recapitalization — will cost $2.87 billion between fiscal years 2015 and 2021. However, the project is expected to extend beyond 2021, and experts told PolitiFact it would likely require another $1 billion in subsequent years to finish the job. The Teal Group has estimated that the project will require an additional $858 million between fiscal years 2022 and 2026.
That adds up to a grand total of $3.73 billion over 12 years. That’s not “more than $4 billion,” as Trump said, but it’s reasonably close — and it’s no secret that defense contracts have a history of escalating in cost over time. Already, in response to inquiries from the media after Trump’s tweet, an Air Force spokesman told reporters to expect the interim $2.7 billion figure “to change as the program matures.”
So Air Force budgetary documents suggest that this should have cost no more than about $3.73 billion “all-in,” which is slightly less than than $3.9 billion that the US is now paying. Unless prices have gone way up in the past couple of months, I’m not sure where the $1.4 billion in savings come from.