Boeing Faces Massive Losses and Delays on New Air Force One Project with Israeli Parallels
Boeing has reported a $280 million increase in costs for the new Air Force One project, raising its total loss on the program to $3.08 billion, according to its second-quarter financial report. The contract, valued at $3.9 billion, involves delivering two new presidential aircraft based on the Boeing 747-800, the latest version of the iconic jumbo jet whose production ended in 2023. To save time and money, Boeing purchased two used planes for conversion, but the project has become a significant financial and reputational setback.
The fixed-price contract means Boeing bears all costs for changes, which have included ongoing configuration and wiring modifications, corrosion found in the airframes, a known issue with the 747-800, and technological updates due to project delays causing some systems to become outdated. These challenges forced Boeing to rapidly hire senior engineers and mechanics with high-level security clearances, essential for working on the highly secured presidential aircraft. The company has increased investment and manpower to meet a revised deadline, aiming to deliver the first plane in 2028 and the second a year later. Recent upgrades include installing a classified communications system enabling the president to conduct secure calls with government and military leaders.
The total project cost is now expected to reach approximately $6.9 billion, with Boeing absorbing the gap between government payments and actual expenses due to underestimating the scope of work. Meanwhile, former President Donald Trump temporarily used a donated 747-800 from Qatar, previously used by its royal family, but after limited flights, the plane was deemed insufficiently equipped with defensive systems, prompting a switch back to older Air Force One planes amid security concerns.
This U.S. Air Force One project draws parallels to Israel’s "Kanaf Tzion" program, where Israel Aerospace Industries won a contract over Elbit Systems to convert a used Boeing 767 into the Israeli Air Force’s primary aircraft. Like Boeing’s project, Israel’s program has also experienced delays and budget overruns. According to Israeli reports, the acquisition and conversion cost about 325 million shekels, with operational expenses reaching 60 million shekels between 2023 and 2025. Reduced flights by Prime Minister Benjamin Netanyahu, due to international arrest warrants, have left the plane mostly grounded but still costly to maintain. The Prime Minister’s Office declined to disclose per-flight costs or insurance details, citing national security concerns. Despite the plane’s intended use for Netanyahu’s delegation and journalists, the office refused to allow journalists to fly on the current U.S. trip, who instead traveled commercially.
