Air Force One Losses Eat Into Boeing’s Q3 Earnings- How will It Go???

The cost of Boeing’s Air Force One deal will eat into the company’s losses for the entire year. The fixed-price contract was negotiated with former US President Donald Trump, but the company subsequently suffered repeated setbacks and ultimately had to write off more than $766 million of the cost. Earlier this year, a probe revealed that one of the employees working on the project was not credentialed and had failed a drug test.

The new planes will not fly until 2026 or 2027, and it will be another four years before they’re ready to carry the president. Until then, the president will continue to use the blue-and-white Air Force Plane that carries the call sign ‘Air Force One.’ The current president’s administration has rejected Trump’s initial plans to change the plane’s color scheme to red, white, and dark blue. This proposal would have raised engineering costs and would result in a longer timeline.

Boeing’s defense division reported a $3.3 billion loss in the third quarter of 2022. The company attributed the losses to higher manufacturing and supply-chain costs and to its Air Force One deal. The company also lost money on other programs such as the KC-46 tanker drone and the Navy’s MQ-25 Stingray.

KC-46 program

Boeing is facing a large bill for the KC-46 program, which has been delayed by 19 months. It has already spent over $6 billion developing the new aircraft. Boeing is also providing extra training for pilots and compensating the Air Force for delivery delays. The new fleet is expected to be operational by October 2025.

The company has reported huge losses on several of its major programs, including the KC-46 tanker and Air Force One. It has written off $1.2 billion on the KC-46 tanker program, and $766 million on the Air Force’s Air Force One jet. It also wrote off $351 million on the Navy’s MQ-25 refueling drone program. And it’s been a disastrous year for the Commercial Crew space program, which cost the company more than $2.65 billion in total.

The cost of the KC-46 program has been reduced by more than $766 million since Boeing released its first estimate of $51 billion in 2013. This decrease was the result of stable requirements and the company’s ability to meet the deadline. Last year, Boeing revised its delivery schedule for the first 18 fully-capable aircraft. Boeing’s updated schedule now projects delivery in May 2019 after two delays in 2017.

Air Force One Deal Cost Boeing $766 Million

Supply-chain issues

In its Q3 earnings report, Boeing said it lost $766 million on the Air Force One project. The deal cost Boeing $1.9 billion, a loss of more than $1 billion per plane. Despite the fixed-price agreement, Boeing had to pay for overages and overruns.

The company was unable to deliver two jets by the time of the Air Force One launch. As a result, it had to switch suppliers to complete the interior work. As a result, the company lost a quarter of its contract. Meanwhile, the company is still on the hook for $3.9 billion, which is more than Boeing’s previous estimate.

According to Boeing’s defense chief, the company has learned from its mistakes in the Air Force One deal. The company is now preparing two 747-8 aircraft for presidential travel. The new planes are scheduled to begin flying in 2026 and 2027.

Trump’s criticism of Boeing

Donald Trump has been critical of Boeing’s Air Force One deal for months. His critics claim the company is taking too many risks to reduce costs. Boeing CEO Dennis Muilenburg defended his company’s approach to military projects. The company said it would deliver the first aircraft to the president in 2024, with the second to follow in 2025.

Boeing is defending the deal, saying that it is necessary to maintain the same quality and safety standards as Air Force One’s predecessors. The company is facing financial pressure from Trump and criticism from China. The company has also been accused of domestic violence by some employees. The company has resorted to suing customers, including the government, to cut costs.

Boeing is building the next generation of Air Force Ones. The new model will be based on the 747-8 series. But the company was criticised when the aircraft’s subcontractors delayed the work, and Boeing filed a lawsuit against it.

Shadman
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