Air Force Stumped by Trump's Claim of $1 Billion Savings on Jet

  • Cost estimates for a new Air Force One still being refined
  • Service awards next contracts for design, aircraft by June 30

Trump and Boeing CEO Muilenburg Talk Air Force One

The Air Force can’t account for $1 billion in savings that President Donald Trump said he’s negotiated for the program to develop, purchase and operate two new Boeing Co. jets to serve as Air Force One.

“To my knowledge I have not been told that we have that information,” Colonel Pat Ryder, an Air Force spokesman, told reporters Wednesday when asked how Trump had managed to reduce the price for the new presidential plane. “I refer you to the White House,” Ryder said. A White House spokesman didn’t respond to repeated inquiries about Trump’s comments.

Trump has boasted that he’s personally intervened to cut costs of two military aircraft -- the F-35, the fighter jet built by Lockheed Martin Corp., and Boeing’s Air Force One.

Read how Boeing’s chief listened in on Trump’s call on Lockheed’s F-35

“They were close to signing a $4.2 billion deal to have a new Air Force One,” Trump said at a rally on Saturday in Florida. “Can you believe this? I said, ‘No way.’ I said, ‘I refuse to fly in a $4.2 billion airplane. I refuse.’”

Instead, Trump said, “we got that price down by over $1 billion, and I probably haven’t spoken, to be honest with you, for more than an hour on the project. I got the generals in, who are fantastic. I got Boeing in. But I told Boeing it’s not good enough. We’re not going to do it. The price is still too high.”

Early Stages

The program to replace the aging Air Force One is in its early stages, and the service is still working to refine its “Acquisition Program Baseline” -- the metrics needed to say how much the program may cost.

Ryder said Boeing is now operating under an initial $172 million contract to work on “risk reduction activities.” The service expects to award contracts by June 30 for preliminary aircraft design and for the two unmodified 747-8 aircraft that will be adapted as Air Force One.

In January, Defense Secretary James Mattis ordered a review of how to “substantially reduce the program’s costs.”

Boeing spokesman Todd Blecher said in an e-mail, “We are committed to working the Trump administration and Defense Department on innovative approaches to affordably provide the capabilities America’s military needs.”

The White House Military Office, not the Air Force, will set the aircraft’s requirements for advanced security, communications and accommodations, Ryder said. The presidential plane is a flying fortress, equipped with advanced electronic countermeasures and able to refuel in midair to remain aloft in a national emergency.

Its communications systems can securely place the president in contact with virtually anyone in the world and command the U.S. military, including its nuclear arsenal, while in flight.

So far, the Air Force has budgeted about $1.6 billion through 2019 for the Air Force One program. It decided in 2015 to let Boeing build the jets without competition because it had the only U.S.-built passenger plane that could be adapted for the purpose. But the service said it would provide for bidding on specialized equipment such as advanced electronics and communications.

— With assistance by Justin Sink

    Before it's here, it's on the Bloomberg Terminal.