Deal finalized: $3.9B price tag for two Air Force One airplanes

12:48 p.m Wednesday, Feb. 28, 2018 News
Since 1990, this is one of two Air Force One airplanes - a Boeing 747, VC-25A - that has been used by Presidents George H.W. Bush, Bill Clinton, George W. Bush, Barack Obama and Donald Trump. BOEING

The White House and Boeing Co. reached a $3.9 billion informal deal to buy two Boeing 747-8 presidential airlifters, officials say.

The deal was announced more than a year since President Donald Trump criticized the cost and threatened to cancel buying a newer version of the Boeing 747.

The program, managed at Wright-Patterson Air Force Base, is led by a two-star general and has about 100 employees in the Presidential Airlift Recapitalization Directorate at the Air Force Life Cycle Management Center headquarters. Maj. Gen. Duke Richardson, the first to hold the top post in the new directorate, took over responsibility of the development of the jet in 2017.

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Deputy press secretary Hogan Gidley said that the president negotiated a $3.9 billion “fixed-price contract” for the new planes. It follows years of negotiations between Boeing and the Air Force — and Trump’s personal intervention since his election.

In December 2016, Trump tweeted that costs for the program were “out of control, more than $4 billion.” He added, “Cancel order!”

Boeing chief executive Dennis Muilenburg met multiple times with Trump to discuss the Air Force One contract, most recently last week.

Boeing, in a statement, said it is “proud to build the next generation of Air Force One, providing American Presidents with a flying White House at outstanding value to taxpayers.”

“President Trump negotiated a good deal on behalf of the American people,” it said.

Gidley said the agreement would save taxpayers more than $1.4 billion.

The Los Angeles Times reported Gidley said in a subsequent email that the $5-billion figure was based on an older estimate from the Air Force “with a 50 percent assurance” and that, with new economic cost adjustments, the government cost figure would be right around or a little above $5 billion.

The Air Force did not immediately respond to a request for comment on this figure.

An Air Force budget document released in February projected the cost of the program through 2023 at $3.9 billion. Historically, yearly figures may change as an aircraft is developed.

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Richard Aboulafia, a senior aviation analyst with the Virginia-based Teal Group, told this newspaper the claim of savings was “theater.”

“The program has been $3.9 billion for quite some time,” he said in an interview Wednesday. The White House “just decided they would come up with a number that would credit them with saving $1.4 billion. But it doesn’t exist in any budget document that I can find.”

He questioned how the White House could reach a deal on a contract price on its own given the highly technical specifications that are part of extensive modifications required to turn a Boeing 747 into a fortified and secure presidential jet brimming with specialized gear.

“Sort of a funny part of all these negotiations is it’s not really clear where the savings would come from at the White House level,” he said. “… This needs to come from the Air Force. They’re the people who are competent in these matters.”

Wright-Patterson and Air Force spokespersons referred questions Wednesday to the White House.

Loren B. Thompson, a senior defense expert at the Virginia-based Lexington Institute and an industry consultant, said he expected the deal will turn out to be good for taxpayers.

“I think this probably ends up being a bargain for taxpayers because Boeing has signed up for a fixed-price contract” while the Air Force will likely want additional modifications before the plane takes flight, he said.

RELATED: Air Force One contract granted to Boeing

“In other words,” he added, “there will be new cost factors added into this plane before it flies that can’t be fully anticipated now but which Boeing is going to be on the hook to cover it as a fixed-price contract.”

Dan Grazier, a defense fellow at the non-partisan watchdog Project On Government Oversight in Washington, D.C., said he has seen estimates the next presidential jet could cost between $3 billion and upwards to the White House estimate of about $5 billion.

“This program is still in its infancy, so any government figures will almost certainly be low,” he said in an email, adding the deal appeared to initially save money but costs historically rise on defense projects even on budgets for fixed-price contracts.

“This still seems like a rather expensive program to me,” Grazier added. “We aren’t really buying anything new. The president currently flies in a modified Boeing 747. … There are certainly a great deal of classified security features that are unique to the presidential aircraft, but I don’t really understand why we have to spend so much on development to produce a newer version of what we already have.”

The Dayton Daily News reported in November 2016 that the White House urgently needed two new presidential jets.

The jetliner is an airborne command post the commander-in-chief would rely on when the nation is under attack, as former President George W. Bush did when terrorists hijacked U.S. airliners and destroyed the World Trade Center and slammed into the Pentagon on Sept. 11, 2001.

“The real challenge and the challenge that is forcing us to buy newer aircraft for the president is to overcome the fact that there are heroics going on every day to keep the current aircraft flying and it’s becoming way too expensive and way too difficult to do that,” Kevin W. Buckley, former Mobility Directorate program executive officer, said in an interview in 2016.

The two new aircraft are scheduled to join the Air Force One fleet in 2024.

The National Museum of the U.S. Air Force at Wright-Patterson has put its sights on acquiring one of the retiring Boeing 747-200 aircraft, designated as VC-25s in the military, but the Air Force has made no announcement where it will land.

The Associated Press and the Los Angeles Times contributed to this story.